EXTENSION OF PUBLIC LAW 480 THURSDAY, JULY 22, 1959 HOUSE OF REPRESENTATIVES, The committee met, pursuant to recess, at 10: 15 a.m., in room 1310, New House Office Building, Washington, D.C., Hon. Harold D. Cooley (chairman) presiding. The CHAIRMAN. The committee will be in order. We are deligated to have with us this morning Mr. Jim Patton, president of the National Farmers Union. We will be very glad to hear you and your associates now, Mr. Patton. Mr. PATTON. Thank you, Mr. Chairman. STATEMENT OF JAMES G. PATTON, PRESIDENT, NATIONAL FARMERS UNION, ACCOMPANIED BY REUBEN JOHNSON Mr. Chairman, I have with me this morning my associate, Reuben Johnson, who handles this division of our work. We have Mr. Baker sitting in back in case any questions come up on domestic matters. The CHAIRMAN. We will be very glad to have Mr. Baker join you when you desire. Mr. PATTON. Thank you. Mr. Chairman, I am grateful for this opportunity to present the views of National Farmers Union on a expanded program to use our great abundance of food and fiber. The committee is to be commended for the thorough review that it is making at this significant time in the operation of the Public Law 480 program. We in Farmers Union are proud of our history of support for the program. Commodity Credit Corporation investment would be half again as large today in the absence of such authority as provided in Public Law 480. Farm income would probably be substantially less and the problems brought on by starving people in the underdeveloped part of the world would most certainly have weakened our position as leader of the free world. In spite of the fact that our food and fiber abundance has served our interest and objectives both domestically and overseas, agriculture is severly criticized for its overproduction and "huge government-owned surpluses.' To make up for loss in income farmers are working harder. Productivity on the farm has gone up at a faster rate than it has in industry. Farmers work longer hours for less than half as much income per capita as people who live in town. 44273-59-33 As the committee knows, National Farmers Union has consistently advocated a workable means of production control operated in conjunction with firm, fair levels of price support. I shall not go into detail because I have stated our position previously before the committee. I believe, however, that such a program continues to offer a realistic and practical solution to the price and income problems of farmers. Even if greater control of output was in the hands of farmers, there would continue to be a need for programs to augment demand such as Public Law 480. I do not believe that it should be necessary to create conditions of scarcity to enable farmers to earn a fair and reasonable return for their labor. Public Law 480 has provided the United States with the means of getting food to hungry people. It is widely supported by the public generally and almost universally supported by farmers. But there are still mixed views regarding the purpose and objectives of the program. The testimony of National Farmers Union in 1954 was headed "Use Food To Win Peace." There were others who honestly believed that the only justification for the law was that of surplus disposal and market development. The question of surplus disposal versus food for peace is largely academic. There is no question of the value of the program in the light of our foreign policy objectives. Through it we have prevented power-mad communistic leaders from using nakedness and hunger as cold war weapons of tyranny and imperialism. We have planned uses for local currency as follows: $1.8 billion in loans to recipient countries; $1 billion to pay U.S. obligations in other nations; $308 million for military procurement; $233 million in grants for econome development; $224 million in loans to private business under Cooley amendment; $52 million for market development; $44 million to purchase goods abroad for underdeveloped nations; $29 million to help finance international educational exchange; and other uses which serve our interest as a Nation. I respectfully submit, Mr. Chairman, that insofar as the function of the program today is concerned, policy has been determined. We are using our food and fiber to promote economic cooperation and development in the underdeveloped nations of the free world as well as in other ways that serve the foreign policy objectives of the United States. The question before us now is not one of determination of policy but one of determination of how best to operate the Public Law 480 program in future years. In spite of the progress that has been made in the constructive use of our food and fiber, Commodity Credit Corporation investment in food and fiber stocks totals $8.9 billion. Farm production in the United States continues to be in excess of consumer demand. Our population is expanding, but at a lesser rate than agricultural output. Another large grain crop will be harvested this year. The corn crop is estimated at 4.2 billion bushels, an increase of 400 million bushels over last year. Prices of those farm commodities that increased by small margins during 1958 are dropping again. As the feed grains supply increases, livestock prices will be threatened. We have already witnessed a crisis among producers of poultry and eggs. I don't want to dwell on the problem of production in excess of commercial market requirements. The point is that in determining the future of the Public Law 480 program, we can be assured of more agricultural production than can be sold in commercial channels at prices fair and equitable to producers. Even if our food and fiber stocks were half what they are now, however, interests of U.S. agriculture would be best served if we used them in needy nations to further economic development and cooperation, thus opening the door to more commercial markets as goals of political freedom and stability are attained. The most significant decision with respect to the extension of Public Law 480 appears to revolve around whether the program shall continue to be operated year by year, or whether authority will be provided to make greater potential use in economic development projects where assurance of continuity is essential. All of those who have made studies of the Public Law 480 program, including John Davis on behalf of the State Department, have recommended long-term commitments of food and fiber to recipient nations. The central element, for example, in Congressman Poage's bill, H.R. 2420, is that of long-term lending of food and fiber. Other food exporting nations have an interest in the ways in which we use our valuable food and fiber supplies. As the committee of the House of Representatives which wrote the original Public Law 480 and the amendments to it, I know that you are aware of the interest of other exporting nations. In recent weeks it has been my privilege to attend a meeting of the executive committee of the International Federation of Agricultural Producers held at Copenhagen, Denmark, and to travel in the Philippines, New Zealand, Australia, Japan, and Korea on behalf of this international organization of farmers which I have the honor to serve. I have discussed many different problems of farmers with leaders of farm organizations from all parts of the free world. I fully subscribe to the efforts that are being made to assure that uses under Public Law 480 not be substituted for our own commercial sales or for that part of the commercial market that has historically and traditionally been supplied by other exporting nations. I would be remiss in my responsibility to the farmers in the United States, however, if I did not underline the great need that exists in underdeveloped nations where no commercial market exists at all. Farm leaders in other nations appreciate the need of underdeveloped nations for food and fiber and there is common ground within the International Federation of Agricultural Producers on this point. Our food and fiber can be used in ways that will increase the earning capacity of the people in the underdeveloped areas of the world and, in the process, their living standards without injuring established commercial markets. Greater use of food and fiber to promote education and economic development will help rather than hurt commercial markets, especially future markets, serving the interest of the United States and other exporting nations as well. As important as I consider this aspect of Public Law 480, I am convinced that there are even bigger stakes involved. The building of a firm social, economic, and political foundation in underdeveloped nations of the free world is of the greatest urgency and impor-. tance. An official of our State Department recently said that U.S. dollar aid under the mutual security program would be needed for 50 years. If our dollars will be needed for such a period to help assure democracy and freedom, we are justified in projecting a foodfor-peace program further into the future. Without detailed discussion, I should like to make several suggestions for extending and expanding the food for peace program under Public Law 480. (1) It is significant that most of the bills before the committee embody the principle of long-range planning. As I have indicated, the justification for dollar aid to needy nations for up to 50 years would apply equally to food and fiber. If there will be a need for dollar aid for economic development there will be a need for food and fiber to help meet cost of local material and labor. Therefore, a good case can be made for removing the termination date in titles I and II. Public Law 480 would be strengthened if provisions of bills before the committee which provide for long-term loans should be added as title IV. I refer specifically to H.R. 2420 introduced by Congressman Poage and to section 401 of the food for peace bills introduced by members of the committee, Congressman Lester Johnson and Congressman George McGovern. These bills authorize use of agricultural commodities to assist economic development in friendly nations by assuring a continuing and stable supply of food and fiber on long-term credit during periods when development projects are underway. By so doing, the resources and manpower of such nations may be more effectively used. In addition to wheat, rice, nonfat dried milk, cotton, feed grains, and tobacco, other agricultural commodities as may be available may be loaned. Shipments are authorized over a 10-year period with repayment and interest beginning with the date of the last delivery in the 10-year period. Repayment may be made by the recipient country over a 40-year period, beginning with the date of the last delivery, and may be made in dollars, in services, or in strategic or other material not produced domestically in sufficient amounts to fulfill requirements. Interest is fixed at 212 percent. (2) Measuring our food and fiber stocks against the opportunities for constructive use in underdeveloped areas leads me to the conclusion that titles I and II authorizations should be substantially increased. I recommend a minimum of $3 billion in a letter earlier this year to the Senate majority leader. I set the amount at double the current title I authorization out of the firm conviction that having reached this maximum authorization, additional quantities of food should be put to constructive use. (3) Active consideration is now being given provisions of bills before you for establishing food reserves in recipient nations. Additional quantities of food used in this manner will, as far as farm interest in the United States is concerned, have the same net effect as an increase in the title I authorization. I urge your approval of section 501 in H.R. 6526 and H.R. 6530. (4) The amendment proposed in testimony of Mr. Clarence Miller, under which grants may be made under title II for economic development work projects, is to be commended. We urge greater use of the voluntary agencies in developing local interest in work projects to relieve unemployment and famine. Also, we feel that the authorization for grants to meet famine conditions should be set at not less than $250 million annually as provided in H.R. 6526 and H.R. 6530. (5) To overcome some of the problems which arise between agencies of the Government over the details of administering Public Law 480, it is proposed in H.R. 6526 and H.R. 6530 that there is an Administrator established who would report directly to the President. We believe there is merit to this proposal and urge your careful consideration. You will recall the valuable overall direction given to food utilization by a similar procedure during World War II. To assist in the administration of an expanded program of food for peace, we believe also that it would be helpful to provide for a committee of distinguished citizens to serve in an advisory committee, something like the Marshall Plan Advisory Committee. (6) We fully support the work being done at the present time by CARE, CROP, and the other groups and religious organizations represented in the American Council of Voluntary Agencies for Foregin Service, Inc. We urge that all possible means be used to expand the use of food and fiber in the activities sponsored and operated by them. (7) We urge that Public Law 480 be amended to authorize expenditure of local currencies owned by the United States (a) in the financing of technicians and other personnel of the United Nations specialized agencies whose work is related to relieving chronic hunger and malnutrition and (b) in activities of the "Free the World From Hunger" campaign of the Food and Agriculture Organization of the United Nations. (8) The Department of Agriculture continues to reject a substantial number of barter contracts submitted for their approval. We fully support the review of the barter program being made by the committee to determine its proper role in the Public Law 480 program. (9) It is almost inconceivable that economic growth and expansion can take place where 90 percent of the people cannot read nor write, where sickness is prevalent, and where children are needed at home for work required for sustenance. We therefore believe that in your deliberations attention should be given to all possible means of using food and fiber to build schools and to further universal free systems of general and vocational education. (10) To help bridge the gap between present unilateral and bilateral action in programing food and fiber into needy areas of the world under concessional terms and the means to a workable multilateral approach along the lines of an international food and raw materials reserve bank, we urge you to give consideration to making food available for use through United Nations by its specialized agencies. I am an advocate, as members of the committee know, of greater multilateral effort in making food and fiber available to needy areas on concessional terms. I believe that this approach is the solution to present as well as future controversy between exporting nations regarding concessional sales, and loans and grants of food. One of the problems that an international food and raw materials reserve or an international development corporation could cope with that cannot be adequately dealt with in bilateral operations is the prob |