Public enterprise funds-Continued COMMODITY CREDIT CORPORATION FUND-Continued Conservation Reserve Program-The Food Security Act of 1985, as amended, provides that the Secretary shall carry out a Conservation Reserve Program by entering into 10- to 15-year contracts with owners or operators of highly erodible cropland to assist them in conserving and using the soil and water resources of their farms. Non-erodible lands which pose an off-farm environmental threat or cause productivity degradation due to soil salinity may also be included. In return for placing land in the reserve, farmers receive cost-share and rental payments, as well as technical assistance from USDA agencies. Annual rental payments may be paid in cash or on a non-cash basis, including payments in the form of commodities or commodity certificates that may be exchanged for commodities owned by the Corporation. Total acres to be included in the reserve by the end of fiscal year 1988 are 25 million. The facilities, services and funds of CCC are being used to carry out the program in fiscal year 1986 and fiscal year 1987. The services and facilities of the Corporation may be used in subsequent years, but appropriations must be provided in advance to carry out the program. Beginning in fiscal year 1988, a separate appropriation for advances to CCC is being requested to carry out the program. See "Special Activities" section. under section 5 (b) and (c) of the Commodity Credit Corporation Charter Act, as amended. export of agricultural commodities and products Commodity export-The Corporation promotes the through sales for dollars or foreign currency, payments, conduct of other operations with respect to the exporta extension of credit, assumption of certain risks, and tion of commodities. Such commodities and products may be those held in private trade channels as well as those acquired by the Corporation. These programs are carried out under the Corporation's charter and other specific legislation. Foreign donations-Under the authority of section 416 b) of the Agricultural Act of 1949, as amended, the Corporation may furnish eligible commodities for carrying out programs of assistance in developing and friendly countries and may pay costs associated with making the commodities available. Such commodities may also be used to carry out the Food for Progress Act of 1985 or furnished in connection with (1) sales under title I of the Agricultural Trade Development Act of 1954, as amended; (2) agricultural export bonus or promotion programs; or (3) agreements by recipient countries to acquire additional agricultural commodities from the United States through commercial arrangements. Payment limitations-The Food Security Act of 1985, as amended, provides that the total amount of deficiency and land diversion payments, excluding any deficiency payment received as the result of a reduction of the wheat or feed grain price support loan level, which a person is entitled to receive under one or more of the annual programs for feed grains, wheat, upland cotton, ELS cotton and rice for each of the 1987 through 1990 crops of these commodities shall not exceed $50 thousand For each of the 1987 through 1990 crops, the total amount of 1 with respect to wheat, feed grains. upland cotton.. ELS cotton, rice, and honey, deficiency payments land diversion payments: disaster payments: Joan deficiency payments inventory reduction pay ments, and gains realired from a marketing loan repay beat and I with respect to other commodities, gains realized by a producer from repaying a loan at less than the original loan level that a person shall be entitied to receive under one or more of the annual programs for such commodities shall not exceed $250 thousand except as otherwise may be authorized by the Secretary Annual rental payments made under the Conservation Reserve Program are limited to $50,000 per persoc. Ive bee-be wotal amount of loans on a crop of boney which a person may have outstanding at any one time cher the annual program established for a crop of boner may not exceed $250,000, less the amount of fans realized by a producer from repaying a boney joan at less than the original loan level. Supply and fora pre-The Corporation can procure from domestic and foreign sources food, agricultural commodities and products and related materials to supply the deeds of Federal agencies foreign govern mects and private and tiernational relet agencies modity and storage facility loan operations of the Cor Loan operations-The following table reflects com poration (in thousands of dollars inventory operations applicable to the preceding proInventory operations-The following table reflects the grams in thousands of dollars: -- Continued Loans made Loans repaid Loan collateral forfeited. Loans outstanding, end of year. Acquisitions Cost of commodities sold. Cost of commodities donated. inventory end of year Investment in loans and inventory, end of year. Net expenditures Realized losses 18,668,433 15,899,748 12,670,062 10,019,347 16,579,315 9,390,583 4,172,250 14,207,329 5,365,687 1,718,411 1,687,051 1,494,350 11,049,610 11,734,545 14,265,091 29,718,043 27,634,293 26,935,153 6,758,198 6,223,119 8,858,176 25,718,514 25,106,493 20,820,452 19,998,006 27,601,562 22,846,902 Operating expenses.-The Corporation carries out its functions through utilization of employees and facilities of other Government agencies. Administrative expenses are incurred for the services of: the Agricultural Stabilization and Conservation Service, General Sales Manager, and other agencies of the Department engaged in the Corporation's activities; and the General Accounting Office for audit. Additional expenses are incurred for ASCS county offices for work related to programs of the Corporation, other ASCS expenses offset by revenue, custodian, and agency expenses of the Federal Reserve banks and lending agencies, and miscellaneous costs. Expenses are incurred for acquisition, operation, maintenance, improvement, or disposition of property which the Corporation owns or in which it has an interest. These expenses are treated as program expenses, Such program expenses include inspection, classing and grading work performed on a fee basis by Federal em ployees or Federal- or State-licensed inspectors; work relating to Commodity Credit Corporation programs performed on a contract or fee basis by Agricultural Stabilization and Conservation Service; and special services performed by other Federal agencies within and outside this Department. Most of these general expenses, including storage and handling, transportation, inspection, classing and grading and producer storage payments, are included in program costs. They are shown in the program and financing schedule in the entries entitled "Storage, transportation, and other obligations not included above," and "Producer storage payments." The Corporation receives reimbursement for grain requisitioned pursuant to Public Law 87-152 (7 U.S.C. 447-449) by the States from Corporation stocks to feed resident wildlife threatened with starvation through the appropriation reimbursement for net realized losses. There have been no requisitions in recent years, however. 2.918.041 2,538.041 The Corporation receives appropriations or reimbursement for cost of these activities as described under each. Activities currently being carried out are as follows (see Foreign Assistance programs for details of items (1) and (2) and see Conservation Reserve Program for details of item (4)): (1) Financing sales of agricultural commodities for convertible foreign currencies and for dollars on credit terms (titles I and III, Public Law 480). (2) Commodities supplied in connection with dispositions abroad (title II, Public Law 480). (3) National Wool Act.-Under the National Wool Act of 1954, as amended, support of prices of wool and mohair is mandatory. The Corporation makes payments to producers in order to bring the national average price received by all producers up to the support price required under the act. (4) Conservation Reserve Program.-The Food Security Act of 1985, as amended, provides that the Secretary shall carry out a Conservation Reserve Program by entering into 10- to 15-year contracts with owners and operators of highly erodible cropland to assist them in conserving and using the soil and water resources of their farms. In return for placing land in the reserve, farmers receive cost-share and rental payments, as well as technical assistance from USDA agencies. Beginning in fiscal year 1988, a separate appropriation for advance to CCC is being requested to carry out the program. COST OF THE NATIONAL WOOL ACT Marketings on which payments made Amount of payments Total payments Shorn wool Unshorn lambs Interest on borrowings from the Treasury (and on capital stock) is paid at a rate based upon the average interest rate of all outstanding marketable obligations (of comparable maturity date) of the United States as of the preceding month. Interest is also paid on other notes and obligations at a rate prescribed by the Corporation and approved by the Secretary of Treasury. The Department of Agriculture and Related Agencies Appropriation Act, 1966, made provision for terminating interest after June 30, 1964 on the portion of the Corporation's borrowings from the Treasury equal to the unreimbursed realized losses recorded on the books of the Corporation after the end of the fiscal year in which such losses are realized. POSITION WITH RESPECT TO BORROWING AUTHORITY, END OF YEAR (In thousands of dollars] 1988 est Item 3,471,697 3,762,897 4,057,597 1,653,156 1,779,256 1,916,756 Statutory borrowing authority. 1,818,541 1,983,641 2,140,841 Funds of the Corporation are used to carry on this program. For the purpose of reimbursing the Corporation, section 705 of the act appropriates each fiscal year an amount equal to amounts expended by the Corporation during the preceding year and to amounts expended in prior fiscal years not previously reimbursed, but not to exceed an amount equal to 70 percent of the gross receipts from duties collected on wool and wool manufactures during the calendar year preceding the fiscal year. Estimated costs and appropriations to the Corporation are indicated in the following table (in thousands of dollars): 1 Assumes enactment of $6,653,189,000 supplemental for reimbursement of CCC realized losses. Note-Accounts payable, accrued liabilities and other outstanding obligations not reflected on this table do not become charges against the statutory borrowing authority until they result in borrowings from the Treasury. Contract authority.-Price support and other programs required by statute may result in the Corporation incurring obligations in excess of available funds and borrowing authority. Such obligations are liquidated from subsequent appropriations and other funds which may become available to the Corporation. Any increase in obligations in excess of available fund resources is reported as contract authority in the year involved; a decrease is reported as the application of appropriations and other funds to liquidate the authority. Funds are borrowed from Treasury and may also be borrowed from private lending agencies and others. The Corporation reserves a sufficient amount of its borrowing authority to purchase at any time all notes and other obligations evidencing loans made by such agencies and others. All bonds, notes, debentures, and similar obligations issued by the Corporation are subject to approval by the Secretary of the Treasury as required by the Act of March 8, 1938 (15 U.S.C. 713a-4). Appropriations.-Under section 2 of Public Law 87155 (15 U.S.C. 713a-11), annual appropriations are authorized for each fiscal year to reimburse the Corporation for net realized losses incurred as of the close of each year. The special activities are financed as indicated in the program descriptions above. In addition to certain reimbursements from other agencies, appropriations are made for the National Wool Act (see above) and for foreign assistance programs. Deficit.-The net realized losses of the Corporation have previously been reimbursed as follows (in thousands of dollars): Legislation will be developed to modify the current provisions of the CCC price support and related programs. Included among the proposals being considered for the legislative package are changes in target prices, sugar program, and planting requirements tied to deficiency payments. Legislation will be proposed to reduce the floor, or minimum annual levels, for short-term export credit loan guarantees from $5 billion to $3 billion. A further legislative proposal would establish a 5-percent origination fee for export credit loan guarantees. Object Classification (in thousands of dollars) 449,739 -8,716 Identification code 12-4336-2-3-351 -8,716 441,023 43.0 Interest and dividends. 441,023 - 132,590 General and special funds: 308,433 308,433 308,433 -308,433 308,433 [TEMPORARY EMERGENCY FOOD ASSISTANCE PROGRAM] [For necessary expenses to carry out the Temporary Emergency Food Assistance Act of 1983, as amended, $50,000,000: Provided, That, in accordance with section 202 of Public Law 98-92, these funds shall be available only if the Secretary determines the existence of excess commodities.] (Agriculture, Rural Development and Related Agencies Appropriations Act, 1987, as included in Public Laws 99-500 and 99591, section 101(a).) Program and Financing (in thousands of dollars) Status of Direct Loans (in thousands of dollars) |