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Y4.SMI: G 76

EXPORT GRAIN SALES

96-1

HEARING

BEFORE THE

SUBCOMMITTEE ON SBA AND SBIC AUTHORITY
AND GENERAL SMALL BUSINESS PROBLEMS

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Printed for the use of the Committee on Small Business

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WASHINGTON : 1979

48-499 O

COMMITTEE ON SMALL BUSINESS

NEAL SMITH, Iowa, Chairman TOM STEED, Oklahoma

JOSEPH M. McDADE, Pennsylvania JOHN D. DINGELL, Michigan

SILVIO O. CONTE, Massachusetts JAMES C. CORMAN, California

J. WILLIAM STANTON, Ohio JOSEPH P. ADDABBO, New York

WILLIAM S. BROOMFIELD, Michigan FERNAND J. ST GERMAIN, Rhode Island TIM LEE CARTER, Kentucky PARREN J. MITCHELL, Maryland

DAN QUAYLE, Indiana HENRY B. GONZALEZ, Texas

DAN MARRIOTT, Utah JAMES M. HANLEY, New York

TOBY ROTH, Wisconsin JOHN J. LAFALCE, New York

LYLE WILLIAMS, Ohio BERKLEY BEDELL, Iowa

OLYMPIA J. SNOWE, Maine FREDERICK W. RICHMOND, New York DOUGLAS K. BEREUTER, Nebraska MARTY RUSSO, Illinois

ED BETHUNE, Arkansas ALVIN BALDUS, Wisconsin

ARLEN ERDAHL, Minnesota
RICHARD NOLAN, Minnesota

THOMAS J. TAUKE, Iowa
RICHARD H. ICHORD, Missouri
HENRY J. NOWAK, New York
THOMAS A. LUKEN, Ohio
ANDY IRELAND, Florida
DALE E. KILDEE, Michigan
IKE SKELTON, Missouri
BILLY LEE EVANS, Georgia
DOUG BARNARD, Georgia
CLAUDE LEACH, Louisiana
TONY P. HALL, Ohio

THOMAS G. POWERS, General Counsel
Lois LIBERTY, Publications Specialist
RAYMOND S. Wittig, Minority Counsel

SUBCOMMITTEE ON SBA AND SBIC AUTHORITY AND GENERAL SMALL BUSINESS

PROBLEMS

NEAL SMITH, Iowa, Chairman
FERNAND J. ST GERMAIN, Rhode Island JOSEPH M. McDADE, Pennsylvania
RICHARD NOLAN, Minnesota

DAN MARRIOTT, Utah
RICHARD H. ICHORD, Missouri

TOBY ROTH, Wisconsin
BILLY LEE EVANS, Georgia

ED BETHUNE, Arkansas
DOUG BARNARD, Georgia
CLAUDE LEACH, Louisiana
TONY P. HALL, Ohio

Dr. JOHN W. HELMUTH, Chief Economist
JORDAN CLARK, Minority Subcommittee Counsel

EXPORT GRAIN SALES

MONDAY, JUNE 11, 1979

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON SBA AND SBIC AUTHORITY
AND GENERAL SMALL BUSINESS PROBLEMS OF THE

COMMITTEE ON SMALL BUSINESS,

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.

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