Y4.SMI:G76 EXPORT GRAIN SALES 96-1 HEARING BEFORE THE SUBCOMMITTEE ON SBA AND SBIC AUTHORITY OF THE COMMITTEE ON SMALL BUSINESS NINETY-SIXTH CONGRESS FIRST SESSION 48-499 O WASHINGTON, D.C., JUNE 11, 1979. Printed for the use of the Committee on Small Business TOM STEED, Oklahoma COMMITTEE ON SMALL BUSINESS NEAL SMITH, Iowa, Chairman JOHN D. DINGELL, Michigan FERNAND J. ST GERMAIN, Rhode Island FREDERICK W. RICHMOND, New York MARTY RUSSO, Illinois RICHARD H. ICHORD, Missouri THOMAS A. LUKEN, Ohio JOSEPH M. McDADE, Pennsylvania LYLE WILLIAMS, Ohio OLYMPIA J. SNOWE, Maine DOUGLAS K. BEREUTER, Nebraska THOMAS G. POWERS, General Counsel SUBCOMMITTEE ON SBA AND SBIC AUTHORITY AND GENERAL SMALL BUSINESS CONTENTS Hearing held on Monday, June 11, 1979 Smith, Hon. Neal, chairman, Subcommittee on SBA and SBIC Authority and General Small Business Problems: Opening statement Hathaway, Dale E., Under Secretary for International Affairs and Com- modity Programs; accompanied by J. Dawson Ahalt, Vice Chairman, Advisory Committee and in charge of the World Food and Agricultural Outlook and Situation Board; Kelly Harrison, general sales manager; John Harris, Office of General Counsel, USDA; and Dr. Richard Heifner, senior author of a study of relationships between large export sales and Page Appendix I.-Report of the Advisory Committee on Export Sales reporting to Secretary of Agriculture Bob Bergland, dated February 27, 1979.. Appendix II.-A study of relationships between large export sales and futures EXPORT GRAIN SALES MONDAY, JUNE 11, 1979 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON SBA AND SBIC AUTHORITY AND GENERAL SMALL BUSINESS PROBLEMS OF THE Washington, D.C. The subcommittee met at 10 a.m., pursuant to notice, in room 2359-A, Rayburn House Office Building, Hon. Neal Smith (chairman of the subcommittee) presiding. OPENING STATEMENT OF CHAIRMAN SMITH Mr. SMITH. The meeting will come to order. Other members are on the way. We will start the hearing. The House Small Business Committee is today examining problems in the export grain sales reporting system which have been brought to our attention. There are inequities in the system which are causing undue burdens on the small producer and processor. Under current export sales reporting requirements, only U.S. firms must report sales to USDA within a limited period. Otherswhich include foreign firms, foreign affiliates of U.S. firms and foreign firms with U.S. affiliates-are not compelled to report sales. At least we don't have any way to require them to do so. So what is happening now is that many large domestic companies avoid our reporting requirements by having a foreign affiliate make the sale. In other instances, export business is not reported because it is channeled through foreign firms. Over a period of years we have had examples where foreign state trading companies have bought large amounts of grain and for weeks have delayed filing any reports. During this time, they have had the opportunity to run their purchases through our futures market and, with inside trading information, guaranteed a low fixed price prior to the time producers and processors in this country were aware of any worldwide change in demand. This results in our farmers selling their grain at prices which do not yet reflect the new increased demand. Thus, the small businesses in this country are paying the difference between the fixed price contract and the real value of the grain. If our producers and processors have available to them the same information as large international trading companies, they could also have the opportunity to make more accurate marketing decisions. (1) |