Dr. KLING. Mr. Chairman, if I may. As you know, these loans that we are discussing today are loans made by international institutions such as the World Bank, of which the United States is one member. But it is true it is a very senior member and a very important member. And I think in all fairness it has to be pointed out that we do not necessarily run the affairs of the World Bank, but we do have a very great influence on the affairs of the Bank. Mr. GONZALEZ. Very much so. If the American position is very strong and very clearly enunciated-though we may not have veto. Dr. KLING. The reason I make the point, sir, is because, as your distinguished Bill Prichard from the State of Georgia, testifiedMr. STEPHENS. He is from my district. Dr. KLING. From your district, correct. As he testified before the House Agriculture Committee-I believe it was about 6 or 9 months ago-we were again dismayed to learn that AID had made a loan of about $4.5 million to Paraguay to produce soybeans. Now Paraguay was already exporting on the order of about 80,000 tons of soybeans and competing with us in Europe and elsewhere. And, as Mr. Prichard said, we felt this was not fair for a U.S. Government agency-not an international agency but a U.S. Government agency-to be making loans that undermine the livelihood of American farmers. And I only want to make the distinction that we have had the problem, too, in terms of the U.S. Government itself making loans, where it really can control its affairs, notwithstanding the problems that we have with the international institutions. Mr. GONZALEZ. Nevertheless, the point I am trying to make is that it may not have been through design. AID may simply have been doing it from the State Department point of view and without checking with Treasury. You know those things do happen in our Government. The left hand sometimes doesn't know what the right hand is doing. So it may not have been an intentional policy to lend the resources to Paraguay for exportation. They may have felt they were doing it for other reasons-perhaps political. But I have seen no statement indicating that at any time our policy would be to help subsidize for exportation purposes. Mr. STEPHENS. Following up on your statement about Mr. Prichard, in that county where he lives, which is Jefferson County, Ga., we had a very fine development of soybean production. And part of it has been through the husbandry of some Mennonite farmers that migrated into that section and have done a magnificent job of developing some of the land, which used to be worn out by cotton. Mr. GONZALEZ. Well, we deeply appreciate your presence here. We do have a Member of the Congress I would like to recognize, if von gentlemen have completed your testimony. Our next witness is Hon. Eligio de la Garza, who is commonly called "Kika." He is the ranking member of the Agriculture Committee. He has indicated his interest. He has corresponded with President MacNamara of the World Bank. We would like to hear from you, Mr. de la Garza. STATEMENT OF HON. E "KIKA” de la GARZA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS Mr. DE LA GARZA. Mr. Chairman and members of the subcommittee, I appreciate very much the opportunity of appearing before your subcommittee in order to offer testimony on a matter of the utmost importance to the 15th District of Texas, which I represent. And I might interject here that I come before you with a little bit of a different problem than the gentleman who preceded me in that we are trying to look into this before it gets to the stage where their problem lies. The investment in citrus in my area, and this involves the citrus industry, Mr. Chairman, provides a major contribution to the economy of south Texas, and if anything were to happen to weaken this industry, it would have a very adverse effect on the citizens of the valley and adjoining area of south Texas, which is not in my district. I might add here also that, of course, this would include Florida and California and some parts of Arizona, but I do not speak for them, but they would have the same problem. Our concern was the action of the World Bank last year in making a staff study on how developing countries could gain at the expense of the U.S. citrus industry. I guess it might be well to identify that study, Mr. Chairman, as IBRD paper No. 193, dated January 1975. It is a Bank staff working paper and the author is Wouter Tims. And I understand the Bank has authorized a related study regarding the most appropriate way to market fresh citrus in developing countries. [IBRD Bank staff working paper No. 193 referred to may be found in the appendix on page 123.] Mr. DE LA GARZA. This citrus would be marketed in direct competition with U.S. exports. I have also learned, Mr. Chairman, that the President of the World Bank-I have learned through him that they financed citrus production in Iran to the extent of $500,000, to Israel $3.6 million, to Iraq $3 million, to Morocco $7.5 million, to Turkey $2.3 million, to Jamaica $900,000. And the World Bank president informed me that none of the citrus production in these countries is exported to the United States, but that begs the question of whether it is exported to countries where the U.S. industry has established or is now establishing a market for its products. Regardless of the letter of the Bank president, you do find that citrus from at least one of these countries, Mr. Chairman, enters the markets here in the United States and it is encouraging that your subcommittee is addressing itself to this problem. Finally, I would like to say, Mr. Chairman, that you cannot help developing countries by destroying industries in the countries which bear the burden of assisting them. A mutual cooperate effort is one thing, but the trend of this staff report is not along those lines. We need to assist developing countries in ways which will not be detrimental. The Texas Citrus Exchange and the Texas Citrus Mutual Growers in the valley have asked me to submit a statement on their behalf, Mr. Chairman, which I have attached to my own. Mr. GONZALEZ. Thank you. That statement of yours, together with its attachments, will be inserted in the record. [The prepared statement of Congressman de la Garza and its attachments follows:] PREPARED STATEMENT OF HON. E (KIKA) DE LA GARZA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS Mr. Chairman, I appreciate the opportunity of appearing before your committee in order to offer testimony on a matter of the utmost importance to the 15th District of Texas, which I represent. As you know, Mr. Chairman, being a neighbor of mine in Texas, the Rio Grande Valley is a major U.S. producer of citrus products of all types, particularly grapefruit. The investment in citrus in my area and the employment it provides make a major contribution to the economy of South Texas. If anything were to happen to weaken this industry, it would have a very adverse effect on the citizens of the Valley. Obviously, we are concerned by any governmental action which threatens to damage the industry. Such an action was that of the World Bank last year in making a staff study on how developing countries could gain at the expense of the U.S. citrus industry. This study examined the potential for substituting sales of citrus to be produced in the developing countries for a large share of the consumer market in the United States and other major consuming countries that is at present held by the United States. Mr. Chairman, this World Bank staff working paper assumes not only that U.S. producers should lose a large portion of their hard-earned market overseas but also should suffer a sizable loss of sales in their own domestic market. I understand that the bank has authorized a related study regarding the most appropriate way to market fresh citrus produced in developing countries. This citrus would be marketed in direct competition with U.S. citrus exports. This means that an industry which needs a sizable and continued growth in its own export program is asked to participate through the taxes it pays in a program of financing its competitors. Also, Mr. Chairman, I have learned from the president of the World Bank that the Bank has financed citrus production in Iran to the extent of $500.000, Israel $3.6 million, Iraq $3 million, Morocco $7.5 million, Turkey $2.3 million, Jamaica $900,000. The World Bank president informed me that none of the citrus productions in these countries is exported to the United States, but that begs the question of whether it is exported to countries where the U.S. industry has established or is now establishing a market for its products. It is encouraging that your committee is addressing itself to the question of whether the development banks should be financing projects which compete directly with American producers and exporters. In the case of my own district, I cannot see that it is necessary for such banks to engage in activities which are flagrantly destructive to established U.S. interests. You cannot help developing countries by destroying industries in countries which bear the burden of assisting them. A mutual cooperative effort is one thing, but the trend of this staff report is not along those lines. We need to assist developing countries in ways which will not be detrimental. The Texas Citrus Exchange and the Texas Citrus Mutual growers in the Rio Grande Valley of Texas are enormously interested in this effort. It is my privilege to include in the record of the hearing a statement officials of the Texas Citrus Exchange and the Texas Citrus Mutual asked me to submit in their behalf. I do this. Thank you, Mr. Chairman. STATEMENT OF CONGRESSMAN DE LA GARZA, SUBMITTED ON BEHALF OF TEXAS CITRUS EXCHANGE AND TEXAS CITRUS MUTUAL The International Bank for Reconstruction and Development is a branch of the World Bank. It is an important agency providing financial assistance to developing countries. A large part of the Bank's funds are contributed by United States taxpayers. |