types.

1 Crop year beginning July 1 for Flue-cured (also Cigar-wrapper) and Oct. 1 for all other

3 Estimate based on volume of auction sales.

Preliminary.

4 Includes estimates for 1963 crops not yet marketed.

Millions of Millions of Millions of Millions of Millions of Millions of

Exports under Governmentfinanced programs as percentage of total

exports

pounds

pounds

pounds
43.8

pounds

pounds

pounds

Percent

540.3

8.5

71.2

1957.

35.8

35.8

35.8

501.0

7.1

1 Title III, Public Law 480 broadened the authority of the barter program, which is conducted under several legislative authorizations.

• Preliminary.

Includes title IV sales for dollars on long-term credit.

RESEARCH ON TOBACCO AND HEALTH

Mr. WHITTEN. Last year-and I think this is one of the things that, with time, this committee is going to be most proud of-we actually changed the law on section 32 and provided that hereafter up to $25 million of section 32 funds can be made available if approved by Congress for increasing the domestic consumption of basic commodities. There is no restrictions beyond that, except such as may be imposed by the Congress each year as it passes judgment on this.

Now Mr. Cooley of the Agricultural Appropriations Committee who comes from a tobacco area, my colleague, Mr. Natcher, and I have been exploring the possibility of working out some kind of joint effort in research with regard to the problems of tobacco, to see if we can help to offset the damage that is being done at the present time to this commodity, which is vital to so many producers, and also is vital to so many States because of the taxes that come from it.

We would be glad to have the benefit of your present advice as well as your future advice as to what we might be able to do, working in connection with the tobacco companies and perhaps the Health, Education, and Welfare Department.

USE OF SECTION 32 FUNDS FOR RESEARCH

Have you had occasion to use section 32 for these research purposes? Our bill passed so late, I don't know if you have had an opportunity yet?

Secretary FREEMAN. Not yet, no. We have not.

There is legislation pending. Dr. Brady testified in connection. with this legislation, as to ongoing research and the kinds of research that might be undertaken which would get at some of the carcinogenic elements in tobacco smoke that the analyses so far from the scientists and researchers indicate are dangerous substances. I believe that these research proposals have been generally favorably received and that authorization to proceed along this line will be forthcoming in due course, at which point the authority under section 32 that this committee wisely accomplished would certainly be a possibility for moving, as I take it, without requiring further appropriations.

Mr. WHITTEN. It is my understanding that what we did was to make it possible for the Congress to provide funds each and every year. I don't think this would be automatic. Certainly there was an assurance we would review each year what would be done with funds for the purpose of approving the use. It will not require a change in the law each year to do it, but I think it will require affirmative action by the Congress to make the funds available under the terms of the less restrictive provisions.

COORDINATED EFFORTS IN RESEARCH

Now I will say briefly here the reason I am exploring this is that for some years we have pressed this matter of partnership undertakings. We have stressed the value of contract research, where you can hire the best people as against hiring young men right out of college, and having to train them and wait for the results. And something else that is greatly important: we have seen Health, Education, and Welfare, looking at their side only, do some unnecessary damage in the cranberry case and in the poultry case with capons. We know what they can do when they act without apparently thinking about the results of loose newspaper releases.

Thus, it becomes highly important that efforts in this area have the coordinated efforts of the companies, whose investments are involved together with the Department of Agriculture, where you have the primary interest in protecting a great agricultural commodity, and the Department of Health, whose primary purpose is the public health. Now in each case, all have an interest in public health, but we need all parties to be familiar with what is going on, so that no undue harm will be done by loose talk. And I say that because we have seen examples of the harm that can be done.

SMALL WATERSHED PLANNING

Mr. Secretary, you have had several new programs with regard to soil conservation work, watershed protection, and flood prevention. I have had reports from my own State that thought this committee provided $500,000 extra the year before last for increased planning,

that actually you provided $8,000 less to my State instead of its proportionate share of the $500,000 increase.

This last year, again we provided increased sums above the Senate figure, I believe some $480,000, for increased planning in this watershed area.

Are you familiar with why these funds haven't been allocated to meet these needs? The demands are terrific.

Put the full facts in the record.

(The information referred to follows:)

ALLOTMENT OF FUNDS FOR WATERSHED PLANNING

In the 1961 fiscal year, of total obligations of $4,997,707 of watershed protection "planning" funds, $98,634 were obligated in Mississippi. In 1962 the initial allotment of planning funds to Mississippi was $100,000. Subsequently, additional increases in allotment totaling $53,923 were made for a special contract for field surveys, and for aerial photography and preparation of contour maps by Kelsh plotter and temporary employment. The actual obligations for 1962 were $150,739, or $52,105 more than the 1961 obligations. Expression of the House and Senate Appropriations Committees feelings on the level of watershed planning work in 1962 was made in Conferees Report No. 726 which accompanied H.R. 7444. It contained the following statement under amendment No. 11:

"The conferees are in agreement that of the funds provided for 'watershed protection,' a total of $6 million may be used for investigations and planning if determined to be necessary. This is in addition to some $1.5 million expected to be expended by States and local organizations for watershed planning purposes." Total obligations for the fiscal year 1962 amounted to only $5,443,207 out of $5,685,000 actually allotted. The primary reason for the limiting of obligations toward the latter part of the 1962 fiscal year was hesitancy to increase permanent staff in the face of a budget of $5,500,000 for watershed planning in 1963. Funds for pay costs amounting to $193,000 were later appropriated and total allotments amounted to $5,693,000. Of this amount $117,199 was allotted to Mississippi and $110,368 was actually obligated. This was 1.97 percent of the total obligation of $5,586,285.

For the 1964 fiscal year the House appropriated $5,892,000 for watershed planning. The Senate reduced this figure to $5 million. The House and Senate conferees agreed on $5,446,000 (including $153,700 added pay costs) for this item. Of this total, $105,000 or 1.93 percent was allotted to Mississippi. Reduced available planning funds were distributed to best meet urgent program needs.

Mr. WHITTEN. Now I think I have covered most of the things I had in mind so far as the general situation in the Department of Agriculture.

AGRICULTURAL CONSERVATION PROGRAM

Now we come to the budget that is before us. If a program were to be judged by the number of participants in it, I guess the ACP program would be one of the finest the Government ever had, with about a million participants each year.

If it were judged by the amount of investment of funds on the part of the farmer it leads to, I believe it would head the list. If it were judged on the amount of real conservation that comes to all of the land in the Nation, I believe it would head the list. And I know if it were judged by the number of times it has been hit at and cut at and cut down, and yet won out, I know it would head the list.

Now with that record, why is it that this program is cut back again this year?

Secretary FREEMAN. Mr. Chairman, I can only say that some judgments have had to be made under a very stringent budgetary policy and economy guidelines laid down by the President. Within those guidelines, the judgments as made involved less than many might find desirable in some programs.

Mr. WHITTEN. May I call to your attention that this is the announcement for the coming year rather than the appropriation for the present. It is a cut in the announced program for the coming year, rather than a cut in this year's budget of money.

I haven't read where President Johnson at this stage has indicated that he intends to make a record on cutting next year. Now I trust and hope he will continue his economy move, because I think it is good, if you apply the economy at the right places. But a cut in a program that generates probably three or four times as much as it costs the Government and which is participated in by over a million people, seems to be a pennywise and pound-foolish decision. But I am not reflecting on anybody. I think my record for about 20 years shows I feel that way about this program, so I am sure it is nothing

new.

MAJOR CHANGES PROPOSED IN 1965 BUDGET

Now what other substantial changes have you made? I would like you, Mr. Secretary, to touch on any substantial changes that are in the budget and the reason behind them. If you wish to turn to your budget officer, we would understand that.

Secretary FREEMAN. Well, let me pick out some here.

Mr. WHITTEN. The major ones. The minor things we shall not take up at this time.

Secretary FREEMAN. We have tried to present a tight and carefully prepared budget, under strict economy standards, which called for making some priority judgments, as I said earlier.

First, certain small research stations of various kinds have been either closed or consolidated; certain types of scientific research have been consolidated, we think without reducing the effectiveness of the overall program. The recommendations on the Extension Service are the same that were made a year ago. They are less than the Congress finally voted for 1964. There were some adjustments in Soil Conservation, but the overall total program, we think, has been maintained. There were some judgments particularly in marketing, where certain research on the physical handling of farm products and transportation facilities research are recommended to be discontinued. There is proposed legislation for supporting the meat and poultry programs on a fee basis.

PROPOSED LEGISLATION

Mr. WHITTEN. Mr. Secretary, I am glad to hear that you got your wheat and cotton bill out of the committee on the Senate side, but there are some things there that I think you are unduly optimistic about.

In the first place, that law hasn't passed yet, and I hope a law will pass. But putting meat and poultry inspection on a fee basis doesn't look too probable. I joined with Congressman Dirksen some years ago and we put it on a fee basis and held the line about as long as John