RESPONSIBILITY OF EMBASSY FISCAL UNIT EMPLOYEES (Recommendation 15):

The employee or employees of any embassy fiscal unit charged with responsibility for reviewing expenditure documents of cooperator organizations should be required to be conversant with FAS regulations relating to expenditures. Moreover, the committee feels that these embassy employees should be made strongly aware of the fact that they have the authority and responsibility to question unreasonable or inadequately supported vouchers.

Results. Instructions to this effect were issued.

[H. Rept. No. 2206, 89th Cong., second sess.]

MARKET PROMOTION ACTIVITY OF FOREIGN AGRICULTURAL SERVICE (SECOND REVIEW) Fortieth Report by the Committee on Government Operations

(Submitted to the Speaker October 7, 1966)

This report is based upon the continuing investigation of the market promotion activities of the Foreign Agricultural Service of the Department of Agriculture to determine the extent to which the Department has accepted and implemented the recommendations made by the committee in its initial report (H. Rept. 1165, discussed above); also to determine whether previously noted deficiencies have been corrected. It was found that the Department has substantially accepted the recommendations of the committee and that gratifying progress has been made by the FAS toward implementing such recommendations.

However, despite the program's overall success, it was found that there are certain areas, such as the attitude of agricultural attachés, where long overdue corrective actions still need to be taken, including facets of the program in which administrative procedures continue to be weak and ineffectual.

The committee felt that further improvement in the efficiency and effectiveness of the program could be obtained by implementation of the four specific recommendations detailed below.

RECOMMENDATIONS

CRITERIA FOR ESTABLISHMENT AND MAINTENANCE OF COUNTRY OFFICES (Recommendation 1):

The Foreign Agricultural Service should be certain that alternatives to the establishment and maintenance of a country office in a marketing area have been fully considered before committing itself to supporting such an office. Further, the committee again urges a realistic appraisal of all available market data by the FAS before it consents to the opening of a country office by a co

operator organization. Moreover, it is also urged that all such country offices, once opened, should be justified by increased imports of U.S. agricultural products or commodities.

Results. The FAS agreed that alternatives to the establishment and maintenance of a country office should be fully considered before committing itself to the support of such an office. However, the FAS maintains that some country offices may not show an increase in imports, but are productive nonetheless in that they maintain a continuing bridge to a foreign market.

REEVALUATION OF MARKET DEVELOPMENT PROGRAMS (Recommendation 2):

Market development programs which have, over a considerable period of time, failed to produce measurable results should be reevaluated and either changed or eliminated as particular circumstances may indicate. Market development programs in countries which are not dollar markets, and which show no positive indications of becoming dollar markets in the near future, should not be continued except as there is a need for servicing commodities in nondollar markets. Market development programs which may be affected by inadequate domestic production (produced at reasonable prices) to supply domestic demand should be reviewed for possible curtailment of activities.

Results. The Department agrees that market development programs which have, over a considerable period of time, failed to produce reasonable results should be reevaluated and either changed or eliminated as particular circumstances may indicate, and believes that this recommendation is already being followed.

The Department agreed that market development programs in countries which are not dollar markets, and which show no positive indications of becoming dollar markets in the near future, should be limited to the servicing functions necessary to assure the resourceful and appropriate use of commodities obtained from the United States under the provisions of Public Law 480. The Department also emphasized that as countries make the transition under Public Law 480 from title I (sales for foreign currency) to the harder terms of title IV (long-term dollar credit sales), it is important that market development activities be initiated to assure a continuing share of the market for U.S. farmers.

The Department also agreed that where there is inadequate U.S. domestic production of a commodity to meet U.S. domestic demands-for example, such as for sugar and wool-we should not have an export promotion program. However, with respect to all agricultural commodities where there is an adequate domestic supply or the ability to produce it at reasonable prices, the Department felt such commodities should be promoted for export.

STRENGTHENING AGRICULTURAL ATTACHÉ SERVICE (Recommendation 3):

In House Report No. 1165, the committee recommended the selective strengthening of the Agricultural Attaché Service. The report also stated in its recommendations that attachés should be key figures in all market development programs. The committee strongly reasserts these recommendations. In addition, the committee urges that attachés be instructed to respond more fully and responsibly to market development plans which are submitted to them for appraisal; to suggest alternatives which may exist, and to generally exhibit more expertise than heretofore seems to have been the case. Furthermore, in situations where governmentto-government negotiations are required (especially in situations involving certain import restrictions), where market surveys are being undertaken, and where active market promotion activities. are being pursued by the offices of cooperator organizations, the attaché should be obliged to take a more active interest than seems to occur at present in many posts throughout the world. Results. The Department agreed that the attaché service should be selectively strengthened. It agreed to the desirability of attachés giving more time to the planning stages of the market development program and is attempting to reduce the time which attachés must give to administrative aspects of market development and thus free up time for this purpose.

It agreed that the attaché has a key role to play in the market development program.

Finally, the Department agreed that the attachés should be better trained to carry out their market development assignments. Toward this end it is conducting workshops in the field and special training courses in Washington for attachés before going to the field or when on home leave. It has plans for still more intensive training if the budget now before Congress is approved.

FAS ATTENTION TO THIRD-PARTY AGREEMENTS (Reconemendation 4):

The committee urges FAS to devote continuing attention to third-party agreements in order to assure that Government funds. are wisely expended. The number of such agreements is large, and their implementation should be supervised on a regular basis. However, the administration of adequate safeguards should not militate against the spirit or the best interests of the market. development programs.

Results. The Department agreed with the committee as to the importance of proper supervision of contracts between U.S. cooperators and foreign trade associations or other cooperating groups, and: plans to set up a joint FAS-Cooperator Committee to further study techniques used in overseas contracting and to recommend such additional guidelines, if any, as may be needed.

[H. Rept. 2231, 89th Cong., second sess.]

STRENGTHENING WAGE-PRICE GUIDEPOSTS

Forty-first Report by the Committee on Government Operations (Submitted to the Speaker October 11, 1966)

This report was an outgrowth of the committee's consideration of H.R. 11916, a bill to amend the Employment Act of 1946 to provide congressional review of wage-price guideposts and to bring to bear an informed public opinion upon price and wage behavior which threatens national economic stability. Hearings were held on the legislation on September 12, 1966. Because of the lateness of the session and the expected imminent adjournment of the 89th Congress, the committee decided that its views and recommendations on this important matter should be incorporated in a report to the House rather than to propose adoption of the bill.

The report contained four principal recommendations which are detailed below:

INCLUDING

RECOMMENDATIONS

WAGE-PRICE GUIDEPOSTS ECONOMIC REPORT (Recommendation 1):

IN ANNUAL

(The committee recommends) That the President continue the present practice of including wage-price guideposts in his annual economic report as required by section 3(a) of the Employment Act of 1946 and that he make comments on or revisions of such guideposts in supplementary reports he may transmit to the Congress under section 3(b) of the act.

Results. President Johnson decided to abandon the wage-price guideposts referred to in 1967, and there was no subsequent compliance with this recommendation.

HEARINGS BY JOINT ECONOMIC COMMITTEE (Recommendation 2):

(The committee recommends) That the Joint Economic Committee of the Congress continue its present practice of holding full public hearings on the President's Economic Report and that these hearings give special attention to the wage-price guideposts contained therein providing an opportunity for representatives of labor, management, and the public to give their views on the guideposts.

Results. This recommendation addressed to the Joint Economic Committee has been fully complied with except for wage-price guideposts which were abandoned as noted in results of recommendation 1, above.

CONTENT OF JEC REPORT TO THE CONGRESS (Recommendation 3):

(The committee recommends) That the Joint Economic Committee, in its report to the Congress, specifically include its findings and recommendations on the guideposts. If the administration's

guideposts are approved by the committee, this congressional action will strengthen their public acceptability. If the Joint Economic Committee's position on the guideposts differs from that of the President, it can be expected that the President would review them in the light of the committee's recommendations and that should result in greater public acceptance and, thus, opportunity of success. This is particularly important with respect to the forthcoming January 1967 guideposts since they inevitably must come to grips with the erosion in the cost of living which has occurred, with the problem of equity between different segments of our economy, and with the problem of the utilization of

manpower.

Results. This recommendation could not be complied with inasmuch as the President no longer formulated and submitted the guideposts to the Congress.

JEC HEARINGS IN SPECIFIC WAGE OR PRICE CASES (Recommendation 4):

We recognize that the application of the guideposts in specific wage or price cases is a different and a complex matter. Here we endorse the suggestions of Secretary of Labor Wirtz and the President's Advisory Committee on Labor-Management Policy for action by that advisory committee in specific cases. This would be consistent with section 4 (c) of the Employment Act which permits the Council of Economic Advisers to constitute advisory committees and to consult with representatives of various groups as it deems advisable. Inasmuch as the Joint Economic Committee of the Congress is already authorized by law to hold hearings, we recommend that where the committee feels that it may usefully supplement the work being done within the administration on specific cases, it hold hearings on them and make its own findings and recommendations. We believe that such action on specific cases and when "crises" arise would help reconstitute and reinvigorate the guideposts in a manner designed to secure the greatest degree of public agreement and support. Thus, the essence of H.R. 11916 will have been obtained.

Results. Little has been done on "specific cases" since issuance of House Report 2231, either by the President's Advisory Committee on Labor-Management Policy or by the Joint Economic Committee of the Congress. However, as the latter was only to supplement the action of the former, it could not be considered in default in this recommendation.