Recipients are farmers and ranchers of declared disaster areas who meet eligibility standards approved by the executive vice president, CCC.

Eligibile feed dealers are persons engaged in selling designated surplus feed grains or approved mixed feeds who have signed standard agreements with ASC county offices and who have posted performance bonds.

Operations.-Emergency feed is available to eligible farmers and ranchers during fiscal year 1958 at a reduced cost of not to exceed $1.50 for each hundred weight.

A farmer or rancher in a designated county who desires to participate in the program makes application to his local Agricultural Stabilization and Conservation county committee. The farmer or rancher than gets from the committee a purchase order indicating the approved quantity of grain he is eligible to buy under the provisions of the program. He buys from a local feed dealer, in effect using his purchase order to pay part of his bill-$1.50 on each hundredweight. He buys from stocks the dealer has on hand, and at the prevailing local market prices except that his purchase order covers part of the cost. In cases where dealers are unwilling or unable to participate in this program in any area, surplus stocks of CCC feed grains are made available to eligible farmers or ranchers at a cost comparable to that which they would otherwise pay under this authorization. Facilities of county ASC offices are used in making such distribution.

The producer obtains the approved quantity of feed grain from his dealer in the form of whole grain (corn, grain sorghums, oats, or barley), or if he wishes he can get the same amounts of these grains as part of mixed feed. The approved mixed feeds are mixed feed A which must contain at least 75 percent by weight of designated surplus feed grain (s) or mixed feed B which must contain at least 60 percent by weight of designated surplus feed grain (s) either whole or processed. The mixed feed must be appropriately labeled by the manufacturer, and show the percentage of designated surplus feed grains contained therein.

The dealer must certify delivery of the feed grain to the farmer or rancher, and the latter must also certify his receipt of the amount specified. With these requirements met, the dealer then receives from the local county ASC commitee a dealer's certificate in terms of dollars. The value of this certificate is the number of hundredweights of the designated grain actually delivered to the producer (up to the maximum authorized by the purchase order) multiplied by the $1.50 per hundredweight.

The dealer can use the certificate (good for a period of 120 days from date of issuance) to buy designated CCC-owned surplus feed grains. He can buy either directly from CCC (through area commodity offices of the Commodity Stabilization Service or from bin sites where grain is stored locally in CCC's own facilities), or indirectly through his regular supplier. The prevailing market price at the time of purchase is used in determining the quantity of CCC grain to be delivered against the certificates. The Executive Vice President, CCC, may limit the sales in redemption of dealer's certificates to specified grades of designated CCC-owned surplus feed grains and to specified locations of such surplus feed grains.

Authority.-Commodity Credit Corporation Charter Act, as amended (15 U. S. C. 714-7140); and section 407 of the Agricultural Act of 1949 (7 U. S. C. 1427).

Basis of estimate

Because of the nature of the program, it is impossible to forecast the extent to which CCC price support stocks will be required for emergency feed assistance. However, for budgetary purposes, it is estimated that 22 million bushels of corn, grain sorghums, barley, and oats valued at $39.2 million will be donated during the fiscal year 1959 compared with 24 million bushels valued at $39.6 million anticipated for the fiscal year 1958 and actual donations in the fiscal year 1957 of 75.0 million bushels valued at $125.6 million.

SUPPLY AND FOREIGN PURCHASE PROGRAM

Summary of latest operations

Objective. To procure agricultural commodities in the United States and abroad to meet the needs of United States Government agencies (principally those administering relief programs abroad), cash-paying foreign governments. international relief agencies, and domestic requirements. The production or stockpiling of agricultural commodities under sections 303 and 304 of the Defense Production Act of 1950 is also carried out under this program.

Operations.-Procurement for this program is usually made during peak marketing seasons and is closely coordinated with the price support program to provide the maximum benefit to American agriculture. Transfers to claimants are at prices designed to reimburse the Corporation for all costs incident to carrying out the program.

Generally, purchases are made at the best price obtainable at either an announced price or on an offer-and-acceptance basis in quantities, although purchases may also be made under formal competitive bids.

Purchases for any claimant, other than a Federal Government agency, require (1) a firm requisition or a firm contract from the claimant and (2) a deposit with the Treasurer, Commodity Credit Corporation, of cash or its equivalent, or other acceptable financial arrangements. Purchases for Federal agencies require a written order constituting a firm obligation. Purchases may be made in advance of firm commitments and prior to deposit of cash only upon specific authorization of the Board of Directors when it is anticipated that no risk of loss is involved. In addition, the Board of Directors may authorize the purchase and stockpiling of commodities in the interest of national security.

The defense production activities include a program to encourage and develop sources of supply of castor beans within the continental United States and to insure a supply of castor beans, oil, and planting seed for industrial uses and stockpiling in connection with national defense.

Authority. Commodity Credit Corporation Charter Act, as amended (15 U. S. C. 714-7140), particularly section 714c thereof; act of July 16, 1943 (15 U. S. C. 713a-9); sections 303 and 304 of the Defense Production Act of 1950, as amended (Public Law 774 approved September 8, 1950); Public Law 96 approved July 31, 1951; and Public Law 429 approved June 30, 1952).

Basis of estimate

Activities currently being carried on include procurement of commodities for other Government agencies and the maintenance of a small stockpile of castor beans under the Defense Production Act. Total acquisitions and carrying charges are estimated to total $0.8 million during the fiscal year 1959 primarily for foundation seeds and feed compared with $0.5 million in the fiscal year 1958 for similar commodities and actual acquisitions during the fiscal year 1957 of $3.3 million, of which $2.8 million represented nonrecurring purchases of wheat flour. Sales proceeds during the fiscal year 1959 are estimated to total $0.9 million compared with $0.7 million anticipated for the fiscal year 1958 and actual sales in the fiscal year 1957 of $10 million, $4.4 million representing liquidation of most of the stocks of American-Egyptian cotton held under the Defense Production Act, and nonrecurring sales of $2.9 million of wheat flour and $2.2 million of sugar, and $0.5 million of all other commodities. A small stock of castor beaus is being held in inventory for stockpiling purposes.

STORAGE FACILITIES PROGRAM

Summary of latest operations

Objective. To provide adequate storage facilities for CCC-owned and producer-owned commodities; to assist producers in financing the construction or purchase of suitable farm-storage facilities; to encourage the construction of needed commercial storage facilities; and to assist producers in financing the purchase of suitable mobile drying equipment to facilitate safe farm storage. Operations.-Bins and granaries were bought by the Corporation on an offerand-acceptance basis and are located only in areas where it is determined that existing privately owned storage facilities are not adequate. Depreciation and other costs of maintaining the structures and handling and conditioning grain stored therein are reflected as carrying charges on the commodities stored.

Storage use guaranties were negotiated under agreements with commercial firms, including cooperatives, operating under the Uniform Grain Storage Agreement, who agreed to construct additional storage capacity for grains and oilseeds. Optional plans provided for guaranties of (1) 75 percent occupancy for a period of 3 years, to be reduced to 40 percent for the next 2 years; (2) 60 percent occupancy for 5 years; and (3) 50 percent occupancy for 6 years. The Corporation fulfills the guaranty, either by actual storage of CCC-owned commodities. or by making a payment. CCC has the option to require warehousemen to reserve space for storage up to the maximum amount of the occupancy guaranty level. The annual rate per bushel for unused space under the guaranty is 75 percent of the applicable annual area rate under the Uniform Grain Storage

Agreement for wheat for the year the occupancy did not reach guaranty level. Applications for new storage agreements were accepted until April 30, 1955, for storage capacity which was to be ready for occupancy by June 1, 1955.

Recourse loans are made to producers, either through approved lending agencies or by the Corporation, for financing the construction or purchase of suitable. farm-storage facilities. Loans are for a maximum period of 4 years, payable in equal annual principal payments, with interest at the rate of 4 percent on the unpaid balance. The maximum amount to be loaned on any new farmstorage facility is 45 cents per bushel of capacity ($30 per ton of cottonseed capacity), provided that such maximum amount does not exceed 80 percent of the cost incurred. Loans are secured by chattel mortgage on the storage facility, real-estate mortgage, deed of trust or other security instrument depending upon the type of structure and the amount of the loan. Any past-due payable or prepayable installment may be deducted and paid out of any amounts due to the borrower on any program carried out by the Department of Agriculture.

Recourse loans are made to producers, either through lending agencies or by the Corporation, for financing the purchase of mobile drying equipment. Loans are for a maximum period of 3 years, payable in equal annual principal payments beginning on the first anniversary date of disbursement of the loan, with interest at the rate of 4 percent per annum on the unpaid balance. The maximum amount to be loaned on mobile drying equipment is 75 percent of the delivered cost. Loans are secured by chattel mortgages. The Corporation may prepay, or require the borrower to prepay, the amount of any annual installment out of the proceeds from any price-supporting loan or purchase agreement due the borrower within 12 months preceding the date on which the installment falls due. Any past-due installment may be deducted and paid out of any amounts due the borrower on any program conducted by the Department of Agriculture. Authority.-Commodity Credit Corporation Charter Act, as amended (15 U. S. C. 714-7140), particularly sections 714b and 714c thereof.

Basis of estimate

Purchases of bins.-While it is difficult to foresee what the storage availability and requirements for the fiscal year 1957 and the remainder of fiscal year 1958 will be, it is estimated, for budgetary purposes, that in 1959, 100 million bushel storage capacity of CCC bins may be purchased for storage deficit areas. A similar estimate is included for the fiscal year 1958 in the event it becomes necessary to purchase bins to provide for large estimated deliveries to CCC of the 1957 crops. In the fiscal year 1957 purchases were made of bins having a storage capacity of about 96 million making a total capacity of CCC owned bins of 990 million bushels as of June 30, 1957.

It is the general policy to procure emergency storage facilities for the storage of Commodity Credit Corporation owned grain only in those instances where the anticipated takeover (by CCC) of grain under price support programs will be greater than the quantity which can be handled by commercial facilities existing or planned for the immediate future within the area of such anticipated takeover. It is necessary to establish requirements for additional storage facilities early enough to assure the procurement and erection of such facilities in time to be available for the takeover of grain. It is difficult to forecast to any degree of accuracy, the quantities of grain that will be delivered to CCC in any particular area in view of the many counties participating in the price-support program and the market and price situation which will exist at the time of such delivery. Since contracts for the purchase and erection of the bins must be executed far in advance of actual needs, subsequent developments in program activity and economic conditions could result in some of the bins proving to be in excess of immediate requirements. In such instances, bins could be moved to other deficit areas, or if not required elsewhere, could be leased to others or remain available for possible future use. Unused space is also maintained in each area to allow for turning and cleaning purposes to minimize loss of grain by spoilage and deterioration.

Storage use guaranties.-Space covered by outstanding storage occupancy contracts entered into in prior years totaled nearly 180 million bushels as of June 30, 1957. It is estimated that such agreements will be outstanding on 170 million bushels at the end of the fiscal year 1958 and will decrease to 160 million by June 30, 1959. Payments under such agreements during the fiscal year 1959 are estimated at $100,000 compared with $150.000 anticipated for the fiscal year 1958 and actual payments in the fiscal year of $73,000.

Storage facilities and equipment loans.-During the fiscal year 1959 it is estimated that loans will be made on farm storage facilities having a capacity of

28.6 million bushels compared with 33.3 million bushels anticipated for the fiscal year 1958 and actual loans made in the fiscal year 1957 on 27.8 million bushels capacity. Loans to finance the purchase of mobile drying equipment during both fiscal years 1958 and 1959 are estimated to be $.5 million-about the same level as actual loans made in the fiscal year 1957.

COMMODITY EXPORT PROGRAM

The following summaries cover the major commodity export programs which the Corporation anticipates will be conducted during each of the fiscal years 1958 and 1959 and the bases for such estimates.

AGRICULTURAL PRODUCTS

Summary of latest operations

Objective. To authorize CCC to participate in projects designed to aid in the development of foreign markets for United States agricultural commodities and products thereof.

Operations.-The Corportion will provide agricultural commodities from CCC stocks or will procure agricultural commodities or products thereof to be used for display purposes at fairs and exhiibts in foreign countries which are sponsored, approved, or conducted by the Foreign Agricultural Service or the Commodity Stabilization Service. The cost of each project may not exceed $25,000. Upon completion of exhibits, commodities may be disposed of through sales for United States dollars, distribution of free samples, donations to charitable institutions in foreign countries, or if practicable, transfer back to the United States. Authority.-Commodity Credit Corporation Charter Act, as amended (15 U. S. C. 714-7140), particularly section 714c thereof.

Basis of estimate

It is difficult to forecast accurately the extent to which CCC stocks will be used or the quantity and type of other agricultural products which may be purchased for use at foreign trade fairs and exhibits. For budgetary purposes, it is estimated that only nominal purchases of agricultural products for such exhibits will be made during the fiscal years 1958 and 1959.

COMMODITY EXPORT PROGRAM, COTTON PRODUCTS EXPORT

Summary of latest operations

Objective. To institute a program designed to protect the competitive position of the domestic cotton industry in relation to sales of cotton products manufactured abroad from American cotton purchased at export prices.

Eligibility. Cotton products manufactured from American upland cotton exported on and after August 1, 1956, in fulfillment of export sales contracts entered into on or after May 21, 1956.

Operations.-Equalization payments, based on the raw cotton content in the products exported, are made to United States exporters on cotton products of upland cotton grown and wholly processed in the United States and which have not been previously exported and returned to the United States. For each calendar month the base equalization payment rate will be determined and announced by CCC prior to the beginning of such month. It will be based on the difference, as determined by CCC, between the average price for Middling 1 unit cotton in the 14 designated spot markets, converted to average location basis, and the average price at which CCC sells its cotton, basis Middling 1 inch at average location, under the cotton export program for that part of the month preceding the announcement of such rate. The rate shall be the same as the preceding month if the change is 0.10 cent or less. Percentages of the base equalization payment rate, reflecting approximate processing loss in converting raw cotton into products, will be applicable for each specified class of cotton products.

Authority-Commodity Credit Corporation Charter Act, as amended (15 U.S. C. 714-7140), particularly section 714c thereof.

Basis of estimate

It is estimated that equalization payments of $17.5 million will be made on cotton products representing the equivalent of 525,000 bales of raw cotton during each of the fiscal years 1958 and 1959 compared with payments of $14.2 million which were made on about 400,000 bales in the fiscal year 1957. There are 13

classes of cotton products and the payment rates for each class is a different percentage of the base equalization rate; therefore the payments can be better estimated on the basis of the raw cotton content of the total of the cotton products which may be exported.

COMMODITY EXPORT PROGRAM, WHEAT EXPORT

Summary of latest operations

Objective.

stocks.

To encourage the movement of wheat into export from free market Operations.-Commodity Credit Corporation offers direct assistance to commercial exporters of wheat and wheat flour based on the difference between the domestic sales price and world export price by issuing wheat payment certificates redeemable only in CCC-owned wheat to wheat exporters and by making cash payments to wheat flour exporters. Exporters will not be eligible for International Wheat Agreement payments. Wheat exported, however, will be eligible for application to any country's guaranteed purchases under the International Wheat Agreement, and for transactions under title I, Public Law 480. Availability of CCC-owned wheat to the grain trade for export is limited to barters and exchanges, sales of wheat of light test-weight, off grade, or the like category, sales to relieve port congestion, and sales requiring CCC credit arrangements or other terms and conditions which the commercial trade cannot meet.

Authority-Commodity Credit Corporation Charter Act, as amended (15 U. S. C. 714-7140), particularly section 714c thereof; and section 407 of the Agricultural Act of 1949 (7 U. S. C. 1427).

Basis of estimate

Exports of CCC-owned wheat.-It is estimated that sales of 16 million bushels of CCC-owned wheat will be made during the fiscal year 1959 outside the International Wheat Agreement at a net cost of $1.2 million compared with similar sales of 3 million bushels with a net cost of $2.1 million anticipated during the fiscal year 1958 and actual sales during the fiscal year 1957 of 94.2 million bushels with net costs of $65.8 million. The large decrease from 1957 results from the anticipated reduction in the barter activity covering exchange of CCC-owned wheat for strategic and critical materials.

Equalization payments.-Wheat payment certificates amounting to $56 million are estimated to be issued in both the fiscal years 1958 and 1959 compared with actual certificates issued in the fiscal year 1957 amounting to $51.9 million. Such certificates are redeemable in wheat from CCC stocks.

Wheat flour payments.--Cash payments on exports of wheat flour are estimated at $20.9 million in each of the fiscal years 1958 and 1959 compared with actual payments of $15.5 million made in the fiscal year 1957.

COMMODITY EXPORT PROGRAM, WHEAT AND WHEAT FLOUR EXPORTS PURSUANT TO INTERNATIONAL WHEAT AGREEMENT

Summary of latest operations

Objective. To encourage exportation of wheat and wheat flour to participating importing countries and at the same time exercise the rights, obtain the benefits, and fulfill the obligations of the United States under the International Wheat Agreement.

Eligibility.-Importing countries that have approved the International Wheat Agreement are eligible to purchase wheat and wheat flour equivalent produced in the United States at specified prices. The wheat and wheat flour may be sold by the CCC or by commercial exporters.

Operations. The Corporation is authorized to make payments to commercial exporters of domestic wheat and wheat flour processed therefrom in the United States pursuant to sales to participating countries which the Commodity Credit Corporation determines are eligible for entering in the records of the Wheat Council as sales against the United States export quota.

The payments are made on the basis of published announcements of the rate for the date or period of sale. Rates are determined on the basis of the relationship between current domestic market prices and current prices equivalent to the International Wheat Agreement basic maximum price of $2 per bushel for No. 1 Manitoba Northern wheat in bulk at Fort William and Port Arthur. Payments to exporters who export wheat are in the form of CCC-owned wheat. Cash pay