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We thank you all, gentlemen. It has been a very enjoyable hearing and we will expect the additional showing that we have asked for will be made.
ADDITIONAL STATEMENTS FOR RECORD
I renew my statement that if anybody feels that if he is compelled to make an additional showing that he has not made that he may submit it in writing.
Mr. CANGELOSI. Mr. Chairman, does that mean cooperatives to put into the record each and every offer that is made by each of the power companies to each of the cooperatives in Louisiana or to April of 1961?
Senator HOLLAND. I am not even limiting in any way or attempting to do so. I think I have made rather general this request that any of the parties here who feel like there is some showing they should make in the record to further more clearly state their case, they may do so but it must be done in writing.
Mr. CANGELOSI. Thank you, Mr. Chairman.
Senator HOLLAND. We will reconvene at 2 o'clock in room S-128 of the Capitol.
(Whereupon, at 1 p.m., the hearing was recessed, to reconvene at 2 p.m. in room S-128, U.S. Capitol.)
(AFTERNOON SESSION, 2 P.M., FRIDAY, APRIL 30, 1965)
MARKET DEVELOPMENT COOPERATORS
STATEMENT OF CLIFFORD R. HOPE
AGRICULTURAL TRADE DEVELOPMENT ACT OF 1954, As AMENDED
Senator HOLLAND. The committee will come to order.
We have next the presentation of the Market Development Cooperators. Mr. Clifford R. Hope, of Garden City, Kans., is with us to discuss the agricultural program on behalf of the Market Development Cooperators.
We are very glad to have you, Cliff. Cliff was serving as head of the Agricultural Committee in the House when I began over here. He tried his best to teach me something, I don't think he succeeded very well. Glad to have you back. Maybe you can do it now.
Mr. Hope. Thank you very much, Mr. Chairman. I certainly will not be presumptuous enough to think I could educate you.
Senator HOLLAND. I admit it would be a pretty hard job.
Mr. Hope. Mr. Chairman, I might say before I start in with this prepared statement that we have, I think, at least two other statements by individual cooperators which they would like to present following this statement if there is time. If there is not time, they would like to submit them for the record; Great Plains Wheat and Great Plains Associates. It might be that you can hear part of their statements.
Senator HOLLAND. You may proceed as you wish with your statement.
FOREIGN MARKET DEVELOPMENT PROGRAM
Mr. HOPE. I think I will follow pretty close. Mr. Chairman, my name is Clifford R. Hope. I am here as a member of a group representing a number of cooperators in the foreign market development program which has been set up by the U.S. Department of Agriculture under the provisions of the Agricultural Trade Development and Assistance Act of 1954, usually referred to as Public Law 480 of the 83d Congress.
Those appearing with me today and the organizations which they represent are as follows, and I am not sure they are all here now but sometime during the day these gentlemen have been here. I would like to have them stand up now as I call their names, the ones who are here:
Dewey Bond, American Meat Institute.
Those who are out of the city and unable to appear today are as follows, and some of these men may be here:
John Farris, Rice Millers' Association.
Frank B. Snodgrass, Burley & Dark Leaf Tobacco Export Association.
Winn Tuttle, Western Wheat Associates.
I want to begin, Mr. Chairman, by expressing to you the appreciation of my associates and myself for affording us this hearing. We are grateful also for the consideration which this committee has given us and our problems in the past. Your action in previous years has substantially strengthened the foreign market development program and has contributed to the remarkable expansion of agricultural exports which has taken place in recent years.
INCREASE IN EXPORTS AND COMMERCIAL SALES FOR DOLLARS
Public Law 480 went into effect early in July 1954. For the fiscal year ending on June 30 of that year, our total exports of agricultural commodities were $2,936 million. Of this amount, $2,331 million was commercial sales for dollars. For the fiscal year ending June 30, 1964, our agricultural exports reached a total of $6,075 million 'which amounted to about one-fourth of all our total exports for that year. Of this amount, $4,512 million was commercial sales for dollars. In each category the amount broke all records.
In the period of 10 years, our total exports increased by 100 percent and our commercial sales for dollars almost that much. These exports covered a wide range of commodities and every State in the Union has benefited from them. New records were made in the case of several commodities including wheat, feed grains, soybeans, rice, poultry, variety meats, tallow and greases, and hides and skins. It goes without saying that the dollars received for these exports have contributed materially in dealing with our balance-of-payments problem.
For the first half of fiscal year 1965, agricultural exports were almost $200 million greater than they were in 1964 from a corresponding period. The maritime strike and possibly other factors reduced exports during the first part of the current 6-month period, and it is possible that the final figures will be less this year than last. However, they will be large in any event and if below 1964, will be at least second only to that year.
While the spectacular expansion which has taken place in agricultural exports may be due to several factors, certainly one of the most important is the foreign market development program set up under the authority of Public Law 480. It is our opinion that as time goes on, the program will assume even greater importance. This is not only because of the increase in world productivity and buying power but for the reason that much has been learned by both Foreign Agricultural Service and the cooperators in the program. In the beginning, there were few and in many cases no guideposts to go by. It was very much a matter of trial and error. There weren't as many unknown factors involved as there are in putting a man on the moon, but there were certainly a lot of problems which could only be solved by experience.
Over the years, much has been tried, and errors have been made, but taking everything together we feel the program so far has been a decided success.
INCREASED FOREIGN AGRICULTURAL COMPETITION
But this is no time for any of us to rest on our laurels. While this country has gone far and done much in expanding trade in agricultural products, our competitors have not been idle. Competition is increasing, and we can expect it to continue to do so. Countries like Canada, Australia, Argentina, New Zealand, and other countries— the economies of which materially depend on agricultural exportsare expanding their production as well as the intensity of their marketing activities.
For some time we were under the impression, or perhaps delusion is a better word, that the countries comprising the European Common Market were willing to reduce agricultural trade barriers, and that this meant increased outlets for the products of U.S. farms. In the hard way we have learned better. We know now that the objective in these countries is not only to become agriculturally self-sufficient but in the case of some commodities to become our competitors in the ex
I might say this does not apply to all commodities-cotton, tobacco, and competitive commodities in the United States—but in the competitive commodities such as feed grains and wheat and the like they
apparently are following a course which can only lessen rather than increase trade, especially in the case of wheat.
RECEDING WORLD TREND IN FREER TRADE
There is increasing evidence that the world trend toward freer trade is slowing down and may actually be receding instead of advancing. The time is here when we, whether in Government or out, who are interested in expanded agricultural trade, must redouble our efforts and increase our cooperation, or see our hopes and dreams disappear as subtly as the smile of a Cheshire cat.
SUPPORT FOR BUDGET REQUEST Mr. Chairman, as we understand it, the recommendations contained in the President's budget message foreign market development in fiscal 1966 call for substantially the same amounts as were included in the 1965 bill, when certain amounts available from former years are taken into account. We urge that the full amount requested be included in the bill, particularly in view of the problems to which I have referred and the big job which we feel lies ahead in market development.
With the committee's permission, I would like to take a few moments to review congressional policy with respect to market development activities under the provisions of Public Law 480 and especially the use of foreign currencies or the proceeds thereof in connection therewith. Although the intent of Congress on this question was spelled out in the original act and has been repeated many times since in appropriation bills and in the various extensions of the act, there has been considerable reluctance in the executive branch of the Government, especially in the Bureau of the Budget, to recognize and accept the clear and definite provisions of the law.
1959 AMENDMENT OF AGRICULTURAL TRADE DEVELOPMENT ACT In order to make certain that ample foreign currency would be available for market development purposes, Congress in extending the act in 1959 wrote into the bill an amendment to section 104(a) which directed that the equivalent of not less than 5 percent of the total sales under title I be made available for the purpose of market development. The report of the House Committee on Agriculture contains the following explanation:
Despite the clear intent of Congress, adequate foreign currencies are not being made available in the principal commercial areas for this important work. To insure that sufficient amounts of these foreign currencies are used for market development as authorized under section 104(a) of title I, this section directs that the equivalent of not less than 5 percent of the total sales under title I be made available for this purpose. This will eliminate the delays and difficulties which have been involved in the process of allocation by making this minimum amount available to the Secretary of Agriculture for this purpose.
However, the Bureau of the Budget, in submitting its recommendations to Congress for the fiscal year 1960, entirely disregarded the provisions to which I have referred giving priority to the use of foreign currencies for market development and earmarking 5 percent of the total sales proceeds and loan repayments for that purpose. Instead it suggested language which would have had the effect of preventing the use of any foreign currency for market development in dollar market countries. Fortunately, this committee rejected the proposal.
In the budget which the Bureau sent to Congress for fiscal 1961–62, it went even further in its efforts to thwart the intent of Congress in the use of foreign currency for foreign market development. On this occasion, the Bureau apparently chose to forget that there was such a law as Public Law 480 and that market development programs had been carried out under its provisions for several years. It entirely ignored the law and set up an item calling for an appropriation in dollars for “market development activities abroad” under title IV of the Agricultural Act of 1954. This title concerns agricultural attachés and its principal purpose is to transfer them to the Department of Agriculture. It has no connection whatsoever with market development under Public Law 480. In fact it does not deal specifically with market development at all. The object of the Bureau in using this subterfuge was apparently to get away from the plain language of Public Law 480 as well as its legislative history which pointed out specifically that foreign currencies were to be set aside and used for market development purposes. This committee, however, did not accept the viewpoint of the Bureau, and the appropriation was made in accordance with the provisions of Public Law 480.
In the meantime, the provision that 5 percent of the foreign currency derived from the sales under title I be set aside for market development purposes had become ineffective, mainly because the currencies of most of the countries which were then purchasing under title I were not convertible and could be used only in the countries of their origin. Thus they were not available for market development activities in countries where we hoped to develop and expand dollar markets.
1961 AMENDMENT TO PUBLIC LAW 480
To meet this situation and to make sure that funds derived from foreign currency would be available, the Congress in extending Public Law 480 in 1961 amended it by providing as follows:
Provision shall be made in sale and loan agreements for the convertibility of such amount of the proceeds thereof (not less than 2 per centum) as the Secretary of Agriculture determines to be needed to carry out the purpose of this subsection in those countries which are or offer reasonable potential of becoming dollar markets for United States agricultural commodities. Such sums shall be converted into the types and kinds of foreign currencies as the Secretary deems necessary to carry out the provisions of this subsection and such sums shall be deposited to a special Treasury account and shall not be made available or expended except for carrying out the provisions of this subsection.
The action of Congress in specifically directing that 5 percent of the foreign currency received from title I sales be set aside for foreign market development and the later amendment providing for the conversion of not less than 2 percent of the proceeds not only indicates the deep interest of Congress in this subject but also goes to show that the Congress desired that a full and extensive market development program be carried out.
Mr. Chairman, those for whom I am speaking today would like to see a more aggressive and imaginative market development program than has been permitted so far with the broader opportunity available for experimentation in order to take advantage of every market opportunity. We think that there is no subject of more importance to