factorily. Also, if the committee does not object, I should like at appropriate times to ask my deputies and the General Sales Manager to present certain information relating to their respective fields of operations to you.

WORKLOAD SITUATION

The major problems facing us in the administration of Commodity Stabilization Service programs have become more difficult in the past year. We have larger inventories of commodities to manage and merchandise and it was necessary to purchase additional CCC storage structures. We have a continued heavy volume of price support on new crops, and our attempts through acreage and marketing controls prescribed by law to reduce the acquisition of new inventories of basic commodities have created new and difficult problems. Also, it has become necessary to restrict the production of sugar.

There are several basic facts concerning the workload resulting from the programs for which the Commodity Stabilization Service is responsible which I should like to reemphasize. First, this workload is not subject to administrative decision by us whether we will or will not do it, or whether we will or will not do it at specific times. A major part of the work is mandatory by law, and, to meet statutory requirements, must be performed at specific times. The individual segments of this work for the most part represent business-type transactions or services and enforcement actions which must be performed. They must be performed within specific time periods if we are to meet statutory requirements and do an effective and economical job.

This continued increase in the volume of work, together with the fact that it must be done, and done on time, has made more important our drive, with the assistance of this committee, to strengthen the supervision and direction of program administration in the field. It has accentuated the need that we increase the coverage and frequency of administrative inspections of field offices, audits, and compliance investigations to assure the protection of the public interest. All of these circumstances and our efforts to meet the demands made by the problems facing us are reflected in our 1957 budget estimates.

ORGANIZATION CHANGES

Effective July 1, 1955, the position of general sales manager was established in accordance with desires of the Congress as expressed in the report of this committee. The responsibilities of the general sales manager are set forth in CSS Notice General No. 308 and the CSS organization chart, a copy of each of which is attached for the information of the committee.

Other than the establishment of the Office of the General Sales Manager, there have been no significant changes in the organization pattern of CSS since we were before this committee last year. We believe we have a good, workable organization pattern, considering the nature of our program responsibilities.

EMPLOYMENT

The Commodity Stabilization Service had a total of 4,953 full-time employees, exclusive of the ASC State and county offices, on June 30, 1955. Of the total, Washington offices accounted for 1,098. There were 3,520 in the 8 CSS commodity offices and 335 were in other field locations. The total employment in the 48 ASC State and 3 insular offices was 1,858.

In the fiscal year 1955, the 3,055 ASC county committees employed each county committeeman an average of 36 days, each community committeeman an average of 3 days and all other personnel an average of 1,734 days per county committee. In total, the county offices utilized 1,258 man-years of county committee time, 970 man-years of community committee time, and 20,300 man-years of all other employment in the fiscal year 1955.

Seasonal changes in the volume of work during the year caused the employment in CSS commodity offices and in the ASC county offices to fluctuate considerably over a 12-month period.

The level of employment in relation to workload is quite low as compared with past years. For example, the average personnel strength of the CSS commodity offices during the fiscal year 1955 was 3,349 or about 9 percent greater than the average of 3,074 in the fiscal year 1951, the previous peak year prior to 1954. On the other hand, the measured number of units of work handled in these offices increased by approximately 17 percent from the fiscal year 1951 to the fiscal year 1955. In the ASC State offices, the average employment in the fiscal year 1955 was approximately 28 percent less than in the fiscal year 1950, the latest previous year when the workload was most nearly comparable. These offices administered more programs in 1955 than in 1950 and the volume of work under several of them such as the CCC grain storage structure program, the CCC price support program, the acreage allotment and marketing quota program and the sugar program was considerably increased over that for 1950.

SALARY INCREASES FOR COUNTY OFFICE EMPLOYEES

In the course of the hearings on the 1956 appropriation request held by this committee last year, there was considerable discussion of deficiencies that had been noted in the operations of the ASC county offices and of possible ways to eliminate them. As the committee is well aware, these offices, under the immediate direction of locally elected farmer committees, are the points of contact with farmers in the operation of the price-support, storage-facility, acreage-allotment and marketing-quota, sugar, and conservation-assistance programs of the Department. Because of these responsibilities, these small offices (the average office used less than 7 man-years of employment in the fiscal year 1955) are faced with some of the most complex and demanding tasks involved in the administration of United States Department of Agriculture programs in the field.

The House committee last year inquired into the method of selection of county office personnel, their rates of pay as compared with full-time employees of Government, the method of operation of county offices and other factors that might have a bearing on the correction

of deficiencies in operation at the county level. The fact that existing pay scales were much lower than those paid classified Federal workers or others for comparable work was brought to the attention of the committee.

During the hearings, the committee requested our recommendations for action needed to strengthen the administration of ASC State and county offices. With respect to the county offices, Assistant Secretary McConnell stated in a letter to Mr. Whitten dated March 22, 1955, as follows:

We are convinced that the primary causes for the difficulties which have been encountered in the handling of CCC loans and storage work by the county offices are the lack of adequate qualified supervision for this work, and inability to recruit and retain capable personnel due to low pay scales. In addition to our efforts to strengthen the supervision of this work, we are taking a strong stand that incompetents shall be removed wherever they are found, whether committeemen or employees. The pay scale for ASC county office employees is quite low compared to pay for similar work in other local offices. In order to raise this pay scale to an adequate level it will be necessary that each fund available for county office costs be increased.

In its report on the 1956 Department of Agriculture and Farm Credit Administration appropriation bill dated March 25, 1955, the committee stated as follows:

It is the belief of the committee that considerable improvement in the operations of this far-flung and important agency would result from a change in personnel policies in the county offices. It is recommended that the regular full-time employees of these offices be required to meet civil-service qualifications for comparable work and be paid on a basis comparable to regular Federal salaries. Such a change should enable the Department to hold personnel in the county offices fully responsible for the performance of their duties. Also, it should help to reduce present turnover and should help in the recruiting of qualified personnel. In addition to correcting many of the administrative deficiencies noted in the investigator's report, such a plan should increase employee efficiency and morale and should result in greater economy in the use of Federal funds. In the committee's opinion, the added salary costs could be fully covered from savings resulting from such a change.

To meet this situation, we are proposing in this budget the initiation of a 3-year program to increase the salary scales in ASC county offices to a level such that by the end of the fiscal year 1959, all of them will be receiving wages equal to those paid Federal employees or others for similar work in the same community. We believe that this plan when put into effect will result in an orderly accomplishment of the correction of the major handicap to sound and efficient operationslow pay scales and the resultant inadequacies in the quality of county office personnel.

No general percentage increase in pay levels is contemplated. Our objective is to improve the effectiveness of operations by proper evaluation of the relative positions of the various counties with respect to workload, difficulty of problems and other job factors, and the establishment of uniformly applied standards for recruitment for the individual jobs. These standards will be raised to as high a level as practicable. Salary scales will be adjusted to fit the individual jobs and to make it possible to compete with other agencies of Government and local employees to obtain and retain the personnel qualified to perform the work. The key job at the county office level with respect to day-to-day operations is the county office manager. It is our intention to concentrate our attention first on getting this job properly evaluated for each county, the appropriate level of com

pensation fixed and a fully qualified individual in the job. Any resources remaining after this is accomplished will be applied to other jobs in the county offices, priority being given to those which are most out of line.

Savings that may result from placing this plan in operation of course will not become apparent until after salary scales have been raised and fully qualified personnel recruited. It is our intention to concentrate on increasing effectiveness and efficiency in the application of the plan.

We have done some preliminary work toward laying the groundwork for placing the plan into effect and will be glad to go into further detail with respect to our findings.

The cost of the salary increases will have to be borne by each of the programs involved.

The estimates submitted for each of these appropriations involved contemplate that about one-third of the cost of the increases required would be incurred in the fiscal year 1957, with the expectation that similar increases will be included in the budget requests for each of the ensuing 2 fiscal years. The breakdown of the estimated requirement for the fiscal year 1957 is as follows:

Agricultural adjustment program_--.
Agricultural conservation program.
Sugar program.

Other

Total..

$2,085, 000 1, 438, 000 45, 520 2,297, 184

5,865, 704

AGRICULTURAL ADJUSTMENT PROGRAMS

The estimated amount required for operation of these programs in the fiscal year 1957 is $41,463,000, an increase of $2,313,000 over the appropriation for the fiscal year 1956. Of the requested increase, $174,700 will be used to provide funds so that State offices may complete the program started last year, as authorized by Congress, of hiring sufficient personnel to properly supervise and review county office operations; $53,300 will be used to cover the cost of additional work which is being assigned in connection with defense mobilization activities, and $2,085,000 will be used to initiate a 3-year program to increase salaries of county office personnel as mentioned previously. The estimate, of course, assumes continuation of acreage allotments and marketing quotas on the 1956 and 1957 crops of tobacco, peanuts, wheat, cotton, and rice, and acreage allotments on the 1956 and 1957 crops of corn. It is also assumed that at least as large a percentage of acreage measurements for performance checking on the 1956 and 1957 crops can be accomplished in the fiscal years 1956 and 1957 as was actually accomplished in the fiscal year 1955 with respect to the 1954 and 1955 crops. It is necessary to check 100 percent of all crops under quotas to insure compliance with acreage allotments since the amount of the farm marketing quota is generally the actual production from the allotted acreage. The estimated per

centage of each of the 1956 and 1957 crops to be measured in the fiscal year 1957 based on actual accomplishment in 1955 is as follows:

This estimate represents minimum requirements and provides for only necessary compliance checking. Inadequate compliance checking would result in larger production of basic crops and would result in more expenditures for price support.

SUGAR PROGRAM

The current estimate of requirements for the fiscal year 1957 for this program is $82,411,071, of which $63,654,891 is for 1956 crop payments, $1,873,000 is for operating expenses and $16,883,180 is for payments which were deferred until the 1957 fiscal year. These deferments include $16,057,180 for 1955-56 payments in Puerto Rico and $826,000 for 1955 program payments in the beet area. The estimate for 1956 crop payments is based on application of average payment rates in recent years to the estimated tonnage of sugar to be produced from the 1956 crop.

In recognition of the difficulty of predicting accurately the size of the 1956 crop so far in advance of its harvest, the total estimate submitted is $67,600,000, or $14,811,071 less than the currently calculated requirements. This reduction is possible because payments on the 1956-57 crop of Puerto Rican sugar would customarily not be made until the beginning of the succeeding fiscal year. Thus a deferral of $14,811,071 of these payments would not create a problem, and should total production of sugar be less than currently estimated, the deferral would be less. On the other hand, should the current production estimates be low, the deferral into the fiscal year 1958 would have to be increased.

The estimate for operating expenses for the fiscal year 1957 is $1,873,000, or $232,400 greater than the amount in the 1956 appropriation. Of this increase, $186,880 is the estimated requirement for compliance checking (acreage measurement) on restrictive proportionate shares which have been imposed on 1956 sugar beets. The remainder of the increase in administrative expenses of $45,520 is to permit the initiation of the plan for salary increases of county office employees.

The Sugar Act of 1948, as amended, expires December 31, 1956. A bill to amend and extend the Sugar Act has passed both Houses and has been sent to conference. There are provisions in this measure which will require an increase in Sugar Act payments to producers and impose an additional administrative workload on the Department.