UNITED STATES DEPARTMENT OF AGRICULTURE

WASHINGTON, D.C.

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ADVISORY COMMITTEE ON :

BIOTECHNOLOGY AND 21ST CENTURY :

AGRICULTURE (AC21) :

FIFTEENTH PLENARY MEETING :

:

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A meeting in the above-entitled matter was held on Tuesday, March 27,
2007, commencing at 8:30 a.m., at the USDA, 1400 Independence Avenue,
S.W., Washington, D.C. before:

Dr. Michael Schechtman, Designated Federal Official, USDA

[A P P E A R A N C E S]{.underline}

Abby Dilley, RESOLVE

Kathy Grant, RESOLVE

Cynthia Sulton, HW&W

[MEMBERS OF The AC21 PLENARY COMMITTEE]{.underline}

Patricia Layton, Chairperson, Absent

Russell Kremer

Sarah Geisert

Carol Tucker Foreman

Duane Grant

Margaret Mellon

Elizabeth Milewski

Adrian Polansky

Alison Van Eenennaam

Kathleen Jones

Nicholas Kalaitzandonakes

Bradley Shurdut

Daryl Buss

Jerome Slocum

Randal Giroux

Russell Kremer

Guy Cardineau

Stephanie Whalen

Lisa Zannoni

Leon Corzine

Nancy Bryson

Michael Dykes

Gregory Jaffe, Absent

Steven Pueppke, Absent

[PRESENTATIONS]{.underline}

[Page]{.underline}

Phil Lempert 5

[P R O C E E D I N G S]{.underline}

DR. SCHECHTMAN: A couple of housekeeping things before we officially get
started. First off, I want to remind everyone if you\'ve got the two
forms yesterday for voluntary submission information regarding ethnic
makeup and handicap for the Office of Civil Rights and you haven\'t
filled them out yet and you wish to do would you please do so and drop
them in the folders that are in place.

The second thing is that Carol Foreman has very kindly and thoughtfully
offered to out and get a get well card for our broken-legged chairman
which I will start passing around and folks can sign and afterwards I
will check the address and send it off to her.

And the third thing that I\'ll mention before we get started is that
this will be the last meeting for Lisa Zannoni, who has been an
important member of this committee since its beginning and I want to
take a moment first to thank Lisa for her service on the committee.

(Audience applause)

DR. SCHECHTMAN: And Lisa has also spent a couple of years in Europe and
picked up a very wonderful European tradition which is that on her
birthday, which this is \-- happy birthday \-- she has bought chocolates
for everyone. So, I will pass these around to the committee members
during the break. Thank you, Lisa.

So, with those few announcements of the morning I will turn it over to
Abby who will start our discussion.

MS. DILLEY: Sure. Maybe one thing that we could do, did people bring
their calendars? We were going to try and look at potential dates in
July, right?

DR. SCHECHTMAN: Yeah. July is the best.

MS. DILLEY: Yeah, let\'s do that now because we\'re actually trying to
do a little bit of work before \--

(Discussion off the record)

MS. DILLEY: So, if people do have their calendars let\'s look at those
and try and set dates, at least tentative dates. We need to check those
with the Chair as well as a few other members who are not here but if we
can get a couple of options that would be terrific.

(Discussion off the record regarding dates)

MS. DILLEY: We\'ll collect calendars.

DR. SCHECHTMAN: I think what this means we\'re going to have to get
everybody\'s calendars and best dates and the least bad ones.

MS. DILLEY: Okay.

DR. SCHECHTMAN: So, why don\'t we move along then. We\'ll save the recap
from yesterday\'s meeting and we\'ll move on to today\'s presentation.
Today\'s speaker is someone who may be familiar to a lot of you. Phil
Lempert is an author and he\'s the Food Trends editor and a
correspondent for NBC\'s Today Show and he also runs a weekly call-in
radio show on Sirius Radio. He\'s starting a new food program on MSNBC.
He runs a website called the Supermarket Guru. There\'s a trademark for
that name and he\'s going to speak to us today about consumer trends.

It should be a fairly interesting multi media presentation and part of
his presentation is the view from the supermarket. Welcome, Phil. Thank
you very much for coming and I know you had some trouble getting here
last night. Glad to see you.

MR. LEMPERT: Thank you, Michael. Well, first of all, let me thank you
all for inviting me here.

MS. DILLEY: Sorry to interrupt you, but, people\'s cell phones are on
and so the \-- and Blackberries \-- so if you could turn those off so
they don\'t interfere with the transcript and then also don\'t provide
musical accompaniment to Phil\'s presentation.

MR. LEMPERT: I want to thank you all for inviting me here and probably
the most important thing in my life and the reason that I wake up in the
morning to really help consumers navigate through our 50,000 items in a
supermarket with all the information that\'s out there.

So, what Michael and I have worked on today is just an overview of some
of the things that I hear, some of the things that I see and then some
facts about this whole issue about health and wellness and what
consumers are really looking for.

First of all, what I want to do is start off by showing you an actual
advertisement. This ad appeared about 100 years ago and just in case you
can\'t read it, I\'m going to read it to you. There\'s a picture of a
hog with a child\'s head on the body. It says make children and adults
as fat as pigs, no cure, no pain, price fifty cents, the best tonic on
the market over 20 years, one and a half million bottles sold last year.
And we're all in the food world.

Take a guess. Just yell it out. What do you think is in the bottle?
Wine? Water? Oh, I thought you said wine. Okay. Sugar, milk, any other
guesses? Alcohol. Actually, fat. A hundred years ago people drank oil.
What\'s the point? The point of it is that I want to use that as an
example to show how consumer trends change and they evolve. And,
typically what we do in the food world is if we see a trend, and I want
you to put a picture of a huge elephant in your mind when it comes to
trends, because trends for me are big and they\'re lumbering and frankly
they move quite slower than we think they do.

So, here\'s this elephant. So, what do we do in the food industry? We
see this elephant and it\'s walking by. What do we do? We start chasing
after it. We\'re just running after it. We have our bows and arrows and
we pull them and it puts an arrow right in the butt of the elephant and
keep right on going.

We get low carbs. Low carbs, when it was over, most food companies
developed products that were low carbs and nobody bought them. Outside
of our world if we take a look at the Razr Scooter, for years it was
successful. When Razr Scooters stopped selling they were another ten
grand. What we need to do in the food world is to get in front of that
trend. And while everybody\'s talking about low carb we should be
thinking about glycemic index. We should be thinking about the next
issue and dig a huge hole and capture it. And that\'s not what we\'re
doing. We\'re chasing after the elephant.

And I guarantee you with our little bows and arrows we\'re not doing
anything. Why is it so important for us to be here today? Well, first of
all, America\'s health report card. You get a failing grade. Early onset
diabetes, heart disease, cancers, on and on and on. We can talk all we
want about having the safest food supply, the cheapest food supply. But,
you know what else, we\'re not doing real well when it comes to that
connection between food and health.

Also, part of my role here is to underscore the fact the consumers need
change and they evolve. Just when we think we got it right we\'re over
here. Just as everybody\'s into low fat, we see low carb. So, it\'s a
constantly moving target and also because of technology and things that
are going on with technology, and I\'m going to give you some examples
in a few minutes, the whole world\'s going to change really quick as it
relates to the food world.

So, here\'s what I see when we look at trends. First of all, our
obsession with food will continue and it will grow. Rachael Ray has a
talk show. What does that tell you? I mean, it\'s not about talent,
it\'s about food. We love our food and that\'s critical. Number two. Fad
diets will always be a factor and they\'re going to be a factor because
whether it be TV, radio, magazines, or books make a fortune off of
selling diet books, off of selling diets. It doesn\'t make a difference
whether there\'s science out there or not to support them, but, if we
take a look at the money that\'s being made that\'s driving fad diets.

Obesity has shifted. We used to be here. The world is fat. Then we moved
over here. The world is fat and that\'s not good. Now we need to move
over here that says the world is fat, that\'s not good, and here\'s what
we are we going to do about it. We\'re not there yet, but, we need to
get there quickly.

For the most, shoppers, when they pick up a product highly processed
foods equates to disease. Pick up a package and there\'s all these
words, they don\'t know what they mean, and there\'s thirty ingredients
in potato chips, they say this is not good. And what they\'re seeing is
pure, fresh, and natural equates to health.

Frito-Lay, for example, has done a superb job on their new ad campaign.
Potatoes, oil, salt, that\'s it. That\'s what they\'re communicating to
consumers. And that\'s going to change a lot when it comes to
ingredients and we\'ll talk more about that. Also, hand-held devices are
sending real time information. That hand-held device, the I-phone, the
cell phone, the Blackberry that you have now gives you access to
everything and everything in the supermarket as well.

And last, value, people want more value than ever before and that
doesn\'t mean that they\'re not going to buy a Mercedes Benz and go to
Costco to buy their products. It means that whatever they spend money on
they want to make sure that they\'re getting value, not price, just
value.

We are hungry for food and health information. It is coming at us leaps
and bounds and that frankly is part of the confusion that\'s out there.
So, if I put together a scorecard here\'s what\'s going on. The
positive, the consumer packages, companies are going in a nutritional
direction. If we were here five years, and I say this with respect and
love, and I said General Mills tomorrow is going to change voluntarily
all their products to whole grains you guys would have said, you know,
what\'s going on here, that\'s never going to happen.

Well, we\'re seeing that happening and that\'s great where these
companies are changing their formulas based on the latest science. We
have the aging Baby Boomer population with very high expectations.
We\'re going to stick everything. We also have technology to predict and
prevent disease. We can go to Japan and we can buy smart toilets that
actually have a micro chip in them that can detect blood in your stool
and send a message to your cell phone to go to the doctor.

We have an increased awareness. People are afraid to get sick because
they\'re afraid that if they get sick they can\'t afford it and people
are now taking more personal responsibility because frankly there\'s a
trust issue. There\'s a trust issue with our food supply with both CPG
companies, retailers, and the government, and we need to change that
because we keep on saying, oh, keep the food supply safe, but, guess
what, the consumers don\'t agree with us.

And we\'re also seeing a lot of great companies doing more kid-based
efforts both in schools as well as public places. So, that\'s a
positive. What about negative. There\'s more health confusion and
illiteracy than ever before. Just about two weeks ago the Atkins folks
come out with their survey and I get about 5-6,000 e-mails a week from
our viewers and listeners and consumers and whenever anything like that
comes out it\'s an e-mail setting, who can I believe, what\'s going on
here. We have a more sedentary lifestyle than ever before. The shame of
this country is it costs more to eat healthy than it does not healthy
and that\'s wrong.

Go the doctor, the doctor says you\'ve got high cholesterol. Oh, my God,
so, for a week I\'m going to eat healthy and then I\'m going to go back.
We don\'t have any discipline when it comes to our food supply and our
diet. The more time pressed, we react in a crisis mentality and
certainly we\'re more stressed out than ever before. Anybody here
working less than you did five years ago? Not reality. So, that\'s what
we have.

And, as I said, what I hear from consumers is who can I turn to. Help,
help. And we as an industry are not helping. We\'re hurting ourselves.
Two weeks ago this story in Time Magazine comes out the same week, and
I\'m sure it was not planned, as the natural products exhibit in Anaheim
and I walked up and down the aisles and talked to hundreds of vendors
and retailers. Less than 25 percent actually read this story. This is
their industry. Forget organic, eat local. Whether you agree with the
article or not is not the issue. Organic has spent 20 years trying to
build up, trying to get consumers empowered about organics, to try to
cut through all those issues and all that confusion.

We now have Wal-Mart and Target selling organic. We now have consumers
interested in organic. We now have the next two to twelve years of
shortages as it relates to organic because of the supply. So, we\'ve now
spent 20 years telling people you better eat organic. And now they\'re
going to go to the stores and they can\'t find organic. So, what does
that mean to a consumer? How confusing is that? And I would suggest that
what we\'re going to see as a result of all this is a new category,
somewhere between organic and highly processed, I\'ll call it, but,
it\'s not what it\'s going to be called, minimally processed. Again,
that Frito-Lay example where there\'s three ingredients all in English
where people can pick up a product, understand exactly what it means.

And that\'s going to be the huge growth area and it is going to be more
fresh food and it\'s going to be simpler ingredients and that\'s going
to be what the future is because, again, we don\'t have enough organic
farms. We don\'t have enough organic food supply to satisfy the demand.

If we take a look at some data, and this comes from A.P. Neilsen Spins
and they just did a survey that talked about why people are eating
natural. Forty five percent are eating it for overall good health. The
same survey a couple of years ago, it was under ten percent. There was
more disease warnings. Nobody wakes up in the morning and says I want to
eat the worst food I can. I want to get early onset diabetes. I want to
get heart disease. I want to get cancer. I want to die an early, painful
death. Who does that? We finally understand that this overall good
health is critical and people are getting empowered.

They\'re finally getting this connection between food and health and
that\'s to everybody\'s advantage and it\'s fabulous. If we take a look
at why retailers are getting into this space, the average supermarket
sales are up about 1.6 percent, but, when we look at the healthy,
natural products it\'s up 13 percent. So, if you\'re a retailer what
space do you want to play. You\'re going to follow the money. So, we\'re
seeing more retailers getting involved than ever before. So, let\'s
change.

Well, low in sugars, whole grains are mentioned, higher fiber, no trans
fat, lower fat, energy, people thing energy products, probiotics is
certainly on everybody\'s radar screen. We\'re seeing more probiotic
products, but, again, more confusion because as we start to deliver
probiotics in dead product, to use an over-used term, how are the
consumers going to get that back, how are they going to understand what
the law is for probiotics versus dead probiotics and certainly organic.

So, if we take a look at what\'s gone on on natural products, more
natural products have evolved and through trial, transitional, regular,
and committed, but, look at the numbers. Fifty-five percent of Americans
today are in that trial mode, transitional, regular, and committed.
Committed is only three percent. So, what we\'re now seeing food
companies and retailers do is try to turn this around. People learning
from here, good for me, good for my family, good taste, and good for the
world and move it down here and move it down here and move it down here
so we actually get 100 percent of the population understanding and
broadening it and, again, not all organic, but, that\'s minimally
processed. That\'s good for you food that tastes great.

And let\'s not forget it\'s all about taste. If it doesn\'t taste good
people are not going to buy it. So, my question to you is, who is the
consumer? This, for me, is where we need to start. And this is what my
marketing plan is, understanding consumers because the average food
company, the average food retailer, the average person doesn\'t
understand how to communicate to consumers.

So, what I\'d like you to do, turn to your left or your right, makes no
difference, tell the person next to you how old you are. Tell them how
old you are. You guys in the back have to do it too. When you\'re done
raise your hand. Okay. Now, what I need you to do is turn to the same
person, tell them how old you feel, then raise your hand.

What I need is I need four volunteers, two men, two women, get up,
introduce yourself, tell us how old you are, and how old you feel. By
the way, I\'m not shy. If you don\'t do it I\'ll embarrass you. Sarah,
why don\'t you start.

MS. GEISERT: Sarah Geisert. I\'m 48 and I feel 48.

MR. LEMPERT: Forty eight and forty eight.

MS. DILLEY: I\'m 48. Abby Dilly. 48/38.

MR. LEMPERT: 48/38.

DR. CARDINEAU: I\'m Guy Cardineau, I\'m 56. I guess I feel 45.

MR. LEMPERT: 56/45. One more gentleman before I embarrass somebody.

DR. DYKES: I\'m Michael Dykes, 52, feel 30.

MR. LEMPERT: 52 and 30. With one exception. Typically what we find is
the average American feels about ten years younger than they actually
are. If we were here with our parents and our parents were our age at
this time you\'d think we\'d have the same answer, obviously not. Our
parents felt 20 years older.

But, when we talk to consumers, when we market products to consumers,
typically we write a marketing plan that says we want to attract a
female, 35-40 years old, and we need to understand how they feel. And
that\'s critical if we want to talk to them, if we want to empower them,
and especially when it comes to food and health issues.

And if we take a look at these projections better than I do we\'ve got
more older people than ever before in this country, this huge Baby Boom
population. And I don\'t know how many of you have been to a Rolling
Stones concert recently, anybody here? I guess I shouldn\'t have said
that. If you take a look at the Rolling Stones, what we need to do in
the food world is go to a Rolling Stones concert and you\'ll see people
who are 18 and you see people that are 70 and everybody looks at this
band as my band and what we need to do is take a lesson from them; how
to communicate; how to have people take ownership of their food and
understand.

If you take a look at the average age of the Rolling Stones they\'re
over 60. Mick Jagger, 62 years old. Mick Jagger, grandfather. Mick
Jagger, father of many. Don Watts has a new liver and Keith Richards at
84 is still climbing trees. We need to understand better how to
communicate, but, especially to this Baby Boom generation with 76
million residents.

There\'s some more good news about the Baby Boomer generation. You hit
50, look what happens. You have arthritis, hypertension, hearing
impairment, heart condition, cataracts, orthopedic impairment,
sinusitis, diabetes, chronic derma and food allergies. How about that
element, that trend? We know that 76 million people are there. What are
we going to do about it? How are we going to convince the food world
that 55 percent of people over 50 have arthritis and the average
product, average bottle of water has a fixture on top that those people
cannot open without being in pain.

So, how many people that have arthritis that want to drink bottled water
are going to do it if they\'re in pain. And that\'s just one example.
How this committee is going to deal with the last one, I don\'t know,
but, you guys will figure that out.

And also if we look at Baby Boomers, there\'s two sets of Baby Boomers,
people who are in their 40\'s now, those that are in their 50\'s, and
look what happens with the incidence of disease. It doubled. So, we
might be focused on obesity, but let\'s not forget here, look what\'s
going on. And, again, that Baby Boom generation expecting the food world
to solve it, expecting the health world to solve it, and those of you
that aren\'t 50 yet and you were laughing at us, well, at age 35 you
start falling apart and we continue to. This is from the Mayo Clinic. We
don\'t have the same body fat in your 50\'s as you did in your 20\'s.

You\'ve got to eat a lot less and exercise a lot more especially now and
we\'re not communicating that. We\'re saying you\'re eating too much,
you\'re sitting by the computer too much, you\'re too stressed out,
you\'re eating the wrong food. But, guess what, there\'s some natural
progression of our body that takes place as well.

In just a few years the first Baby Boomer will hit 65. You talk about
Baby Boomers hitting 50. Now we\'re hitting 65 and when it comes to that
new era of retirement, because Baby Boomers are not going to retire,
you\'re going to stay in the workforce, a lot of reasons, one of, they
can\'t afford to retire. The whole world is going to change even more.

What\'s the consumer thinking? Well, first of all, and I want to show
you some stats that we just did from the National Confectioner\'s
Association, an annual survey of about 3,500 people across the country
and just some snippets of this. In fact, it wasn\'t even released yet.
It was just highlights of it at their conference about two weeks ago.

First of all, what we found is 86 percent of people eat home-cooked
meals three times a week. That\'s the good news. Forty two percent eat
at full service restaurants once to three times a month. Thirty five
percent eat fast food less than once a month. So, we\'re seeing that
reverse. What we\'re also seeing is 25 percent of them are eating candy
at least once a day and 36 percent are eating snacks at least once a
day.

What\'s the most important finding from the survey, freshness,
expiration dates, how fresh is my food. Critical. And this survey was
done between November and December of last year. People are very
concerned about freshness. They\'re also very concerned about having
accurate shelf tests at retail. There\'s more problems than you can ever
imagine with accuracy. Clean, neat shelves, low prices, store brands,
and low prices here are about half the people and at the bottom, 11
percent, but, that keeps on growing because the year before that was at
6 percent. You\'re going to see that move up.

For a healthier diet people could choose from a list of 31 possible
activities. Seventy-eight percent are eating more fruits and vegetables.
Fifty nine percent, less fried foods. Fifty-three percent, more bottled
water. Fifty-one percent, more whole grains. Fifty percent less junk
food, forty nine percent more fresh foods, and seventy percent of these
people across throughout the country said their diets could be healthier
and they\'re already doing a lot of the good stuff.

What\'s the motivators of retail prices, number one. Brand is number two
because they trust that brand and they really have a big trust issue
going on. Health claims, preservatives and additives and organics. Those
are the top five motivators that people are telling us right now.

Are you more or less concerned about your family\'s health? Eighty two
percent are more than a year ago. They\'re concerned about nutrition,
fitness, weight control. A year before this fitness was number one. The
year before that weight control was number one. So, we\'re finally
trying to think realistically about overall nutrition versus one quick
fix. How closely do you read ingredient statements? Sixty-six percent of
people are reading ingredients completely. That\'s outstanding and 21
percent are scanning. Ingredients are key. Again, I\'ve said it three
times already. The simpler the ingredients, the more likely that product
will succeed.

So, is this having an impact today? Let\'s look at some of the factors
that are changing the food world. First of all, the consumer is becoming
the commander of the shopping experience. You go to technology. The
I-phone, the Dokomo (sp?) Phone, the Standby Phone. Technology is there
now that I can take my cell phone, go into a store, I can scan a piece
of fish, find out when it was caught, the name of the boat it was caught
on, the name of the captain, and when it was delivered to the store. I
can have coupons in my cell phone. I can compare nutritional
information. I can program in food allergies and I scan a product on the
shelf and it will tell me that that product is something I should not
consume.

All that is not even today, it\'s yesterday. All that technology and
consumers are finally starting to embrace it and use it and the question
is, how is the food industry going to respond to that? Because now the
consumer because he\'s smarter than the retail, perhaps even the
manufacturer and knows much more about comparison.

I can go into a store and perhaps for food it\'s not a great example,
but, I can scan a product and then see the same product price at six
other stores, whether it\'s a stereo, whether it\'s a piece of organic
meat, and I can compare prices. All of that, I\'ve become the commander
of that shopping experience.

There\'s also you might have heard of Stop and Shop in Boston has a
computer that\'s mounted to the cart and go by and you scan things. Now,
here\'s a company in England that has a build-on for that, but, again
what you do is you\'re putting in a nutritional profile, and I know
it\'s hard to read but that\'s a chart of what I want my nutritional
profile to be, and as I scan the products it will tell me whether or not
that product meets my nutritional guideline.

So, you know what happens? I\'ve gone through, I\'ve done all this, and
I\'ve had a tough day and that Twinkie looks really good. It really
looks good and I\'m scanning that and I\'m thinking all of a sudden
it\'s going to say have you really had that. It\'s going to change. The
information is really going to change that whole nutritional profile and
how you look at it. Is this going to be for everybody? Absolutely not.
Absolutely not. But, it\'s going to be for a majority of the population.
Food is finally understood, the connection between food and health.

We want more responsibility. We don\'t trust our health care system. We
don\'t trust our food supply. We don\'t trust anybody so now what we\'re
going to do is we\'re going to go into a store and we\'re going to buy
for \$99 a DNA kit and you can buy one of these five kits, send in your
DNA for analysis. It comes back with a little book to say whether or not
you\'ve got a predisposition to that disease based on your DNA. You take
the booklet, you go back into the store and to the supermarket today,
you work with a registered dietician who\'s actually going to come up
with a shopping list for you to help ward off the potential problems
that your DNA has shown.

How are you going to deal with that? America is agreeing, finally.
Finally we get it. We understand that our environment is our
responsibility; that whether it\'s hybrids; whether it\'s our food
sources; whether it\'s companies getting more involved in our
environment and that\'s great. I mean Wal-Mart, for God\'s sakes, has
windmill powered stores. Wal-Mart. And if they\'re doing it,
everybody\'s doing it.

Food safety issues. This keeps me up at night. I\'m saying this with
respect, but, I got to tell you, whether it\'s mad cow, avian flu, *E.
coli* in spinach, I don\'t care, we need to fix this problem really
quick because consumers are very concerned. With the pet food recall,
and I don\'t do anything on pets, I got so far since Sunday about 11,000
e-mails from consumers who don\'t know what to do. How did rat poison
get in our food supply? And the shame of it is we\'re not reacting fast
enough. There is no reason why every cow in this country doesn\'t have
an R factor test.

When it takes months after months to track a cow with mad cow for our
food supply, I mean we put tracking tags in our dogs because we\'re
afraid we\'re going to lose our pet. This is a little bit more serious,
guys, and I don\'t care how we want to look at the story, but, people
are concerned and nervous about mad cow and avian flu is going to be
even worse.

And if you take a look at sales in the poultry industry since avian flu
last year poultry sales are down. And what\'s shocking to me is, again,
the confusion. There\'s a good possibility you\'re not going to get
avian flu. Eggs, because of the process of eggs, again cold water bath,
you can\'t cook eggs to wash them unless everything\'s a hard boiled
egg, that\'s because of the dropping could carry Avian Flu. Egg sales
are fine.

So, again, what we need to do is be much better communicating. Food
allergies, I\'m very concerned about it. We can talk all we want whether
it\'s the environment, whether it\'s our water, whether it\'s mom
avoiding certain foods because they\'re afraid their kids are going to
have a peanut allergy, so what do they do for nine months, they don\'t
have peanut butter and, guess what, the kids then have a peanut allergy
because there\'s no immunity. But, we\'re seeing more food allergies
than ever before and more food companies coming out with whether it\'s
gluten-free or other food allergy specific foods.

My objective is very simple. My objective is to help consumers, as I
mentioned before, navigate, understanding what\'s right, what\'s wrong,
hoping the retailers understand that as well. A consumer today when they
shop it\'s all about optimism, socialization, diversity, and trust and
participation and that\'s critical for consumers. SupermarketGuru.com
that Michael talked about, we get about 11 million unique visitors.
We\'ve got our consumer panel of over 66,000 people. We contain no
advertisement. It\'s all about just communicating. I\'d like to suggest
you come visit us, sign up for our news flash.

We also have a secret area here, you can\'t read it, which says your
path to consumer enlightenment. You can double click on that. You can
get our free industry newsletters and just keep up-to-date on everything
that\'s going on.

Time Magazine this past year came under a lot of criticism, you know,
the person of the year was you. Really that information age about how
things are changing and that\'s critical because in today\'s
environment, because of the internet, we\'re now moving to a different
level of the internet. We\'ve got a world of extremes today. We were
talking before about profits. Starbucks is over here. Starbucks has the
worst coffee in America. It\'s burnt. You go into the store, there\'s a
register. They want to know your name. They\'ve got couches. They never
want you to leave. They want a relationship and your four dollars.

Over here, you\'ve got Dunkin\' Donuts, probably the best coffee in
America, 99 cents. They cover over their name tag because they don\'t
want you to know their names and they don\'t want to know your name,
and, in fact, they\'ll even trust you to putting your own milk and sugar
because they know you\'re going to make a mess. They do it very, very
well. Consumers have more choices than ever before.

(Slide presentation)

MR. LEMPERT: So, a supermarket in Second Life, virtual world, Second
Life has now over four million people and this is not animation, this is
actually a cinema. We invited people on Second Life to come into our
store and just walk around. You go on Second Life, you create your
avatar, your second being, comes out Sims World (sic) and those of you
people who have teenagers know what I\'m talking about, those of you who
don\'t don\'t have a clue and you never will. But, what we do is we\'re
setting this up, we\'re not selling anything. We\'re using this in the
food industry as open architecture to get closer to the consumer.

The Center for Disease Control earlier this year, actually they have an
island on Second Life. They inoculated over 10,000 people with the flu
virus and then they unleashed the flu to see what the reaction would be.
We need to again to get in front of that elephant. With Second Life and
all these virtual worlds are it\'s now a three-dimensional aspect of the
internet.

The internet you go on now, you Google something, up comes a page, you
read it, maybe you see a video, maybe you see some ads, that\'s
yesterday\'s technology. It\'s now being interactive. It\'s being able
to go into a world and communicate in real time and ask questions in
real time.

So, for mad cow, what a consumer can do after May 1st is go to the
supermarket on Second Life and find out everything they need to know in
real time about mad cow, not passively, and be able to ask questions.
So, what have we done for the consumer about education? The celebration
of food, which we have forgotten, we\'ve got to eat the stuff and should
be fun and making a connection.

For the retailer, it\'s marketing research and it\'s a path to the
future and for USDA it could be leadership and consumer insight. And
this is available to all of you as well to test different ideas and
concepts.

We\'re getting the word out. NGA, GMA, NCA and IBM are all involved in
this. We\'re actually going to have a ribbon cutting at the FMI in Kraft
Foods. Major publicity efforts, obviously the Today Show first, but,
everyone\'s as well and also just having an ongoing dialogue with
consumers, also through my show that\'s launching in September on MSNBC.

This is a picture of my dad and one of my grandfather\'s favorite shots.
I\'ve grown up in the food world. My grandfather was a dairy farmer. My
father\'s a food manufacturer and a food importer. And my father taught
me a very valuable lesson. Walking up and down the aisles of the
supermarket and tapping people on the shoulder and talking to them.
We\'ve got this fabulous laboratory out there and we spend all these
hours, millions and millions of dollars trying to figure out what the
consumer wants, but, we never ask the consumer. I\'m lucky because they
e-mail me. They can find me. But, what we need to do is get out there
and see what people are buying in the food retail environment.

The future of the world rests for me in the three C\'s. First, catering
to health and wellness. Second, to create a convenient shopping
experience it\'s not feasible at the checkout. And, third, to celebrate,
eating, assembling and cooking. I don\'t know how many of you go to
Costco but I love the fact that Costco celebrates food.

The traditional supermarket, they sample Friday and Saturday. They find
the oldest, living human being possible who can still stand, get them an
old card table, a filthy toaster oven, and maybe a two hour break in the
middle of the day. Costco builds sampling stations. They want to be
proud of their food. They want to celebrate food.

I just did a report for 20/20 a few months ago at a Costco in Staten
Island. We\'re done, I\'m walking around, I walk past a guy in a
sampling station, a polished human being ever, with a cowboy hat another
two feet over his head, says to me, hey you, you want to taste the
world\'s best chili. I said, nah, I\'m not a chili guy. He said, you,
come over here now. I did. I\'m still not a chili guy. But, they had
fun. It\'s food. It\'s to be enjoyable. And we\'ve lost that somehow.

One final thought. First of all, consumers will change. No question
about it. Keep in mind that elephant. Let\'s get in front of it. The
food world is in flux. Costco, Bed, Bath, and Beyond, the supermarkets,
convenience stores, Petco, everybody does it, because people have more
choices. We used to go to the same supermarket every week with our
parents either Friday or Saturday every week. Now, the average person
buys food 2.2 times a week and we\'re visiting several different
channels of distribution every month. Big difference.

2007 for me is about health and is about everything convenience,
technology, and value and also what we need to do is we need to focus
both on the trade and the consumer relationship. Our job in the food
world really is to spice it up. Our job is to leave this food world
better than we found it. Thank you very much.

(Audience applause)

MS. SULTON: Does anybody have any questions for Mr. Lempert? Duane and
then Michael.

MR. GRANT: Phil, you touched only briefly on the role of government in
this whole food world basically to fix it faster. Can you give us a
little bit more of, I guess, your sense of the role that government
plays in this universe?

MR. LEMPERT: Sure. I\'m assuming everybody can hear me. What has me very
concerned over this past year is the government\'s role in trans fat. I
am against trans fat. I don\'t think we need to legislate against trans
fat. Phil Sacharoff, fifteen years ago, with his own money runs ads
about palm oil, that it\'s bad for us, and what happened is all the food
companies rushed to get rid of palm oil and they put in trans fat. Now,
the scientists say palm oils are great, trans fats are bad. I think that
what the government\'s role needs to be, and this might sound odd, but,
they need to control the release of scientific information that\'s not
scientific. And I think that\'s the problem.

I think what we have is we have consumers, as I mentioned, more confused
than ever before and, again, anybody can do any kind of latest study
that might be bought or not be bought. If you remember the low fat study
of last year, you know, oh, my God, 60,000 women, 20 year \-- I might
get the numbers wrong \-- 20 years, low fat, you know, didn\'t affect
anything and then two or three days later, you know, the people who
worked on the study said, well, you know, these women weren\'t really on
a low fat diet.

So, the poor consumer\'s sitting there saying, help, help. What the
government needs to do certainly with food safety issues that\'s clear
to me. We need not to send form letters to people who are in violation.
We need to, without being political, we need to give money back to the
FDA and USDA for food inspections. Obviously, we have this huge drain on
our economy right now with the war and understand that, but, you can\'t
just keep on cutting USDA and FDA\'s budget and think that everything is
going to be okay.

At some point we actually have to have an inspector. When I was growing
up, and I grew up in North Jersey and I worked for my dad, what I did is
I went to the Bronx Terminal Market, the Brooklyn Terminal Market,
Newark, and went into all the meat cutters and everything. You always
had an inspector sitting there when they were cutting meat, when they
were open. And was it a perfect system? Absolutely not. But, I\'ll tell
you, a lot less people were \-- it was a better system where we had
somebody there.

So, I think that the government from a food safety standpoint needs to
do a lot more; needs to tag every cow; needs to really fix the whole
trust issue as it relates to food safety, number one. As far as health
claims, I think what we need to do is we need to ask all these companies
who have put their logos on different products, you know, this means
this, this means this, we need to have a level playing field because I
can go into the cereal aisle, for example, and I can see three or four
different logos all of which have different criteria and that\'s wrong.
And the average consumer has one thirty-second of a second to give their
attention to a particular product on the shelf because of the size of
the supermarket, 22 minutes on the shopping trip. It\'s not there.

I think we are doing a lot to confuse people versus to help people and,
yes, we can say it\'s marketing and one brand should have the right to,
you know, out-market the other brand, but, we\'re talking about
healthier. We\'re talking about people really understanding. We have
retailers selling organic salmon. There is no such thing. There\'s no
organic regulation for seafood.

How are retailers allowed to sell organic salmon at \$25.00 a pound? It
doesn\'t make sense. And I\'ve gone into those stores and I\'ve talked
to the seafood person and I\'ve said, oh, tell me, is this really
organic? Oh, yeah. And, you know, the first couple of times I said,
well, you know, there really is no organic and they\'re like sobering,
somebody\'s called them.

MS. SULTON: Michael.

DR. DYKES: You were talking about people feeling older than what they
are and people feeling younger than what they are. Any sense of what the
next generation behind us, how they look at all these kinds of things?

MR. LEMPERT: Definitely. The children of Baby Boomers feel cheated. We
Baby Boomers since birth have had the spotlight on us. And we are
probably the first generation ever not to pass the torch. When you think
about your parents and grandparents they worked hard to give us a better
life. We\'re working hard to give us a better life. But, we\'re not
passing it on. So, I would suggest that the Gen X and Gen Y there\'s a
lot of resentment there. They don\'t have the work ethic that Baby
Boomers have as a result of that.

When it comes to food and health, it\'s secondary. They\'re much more
into taste. They\'re much more into preparing foods as a group, which is
real interesting and I love that, that, you know, in our era for most of
us, you know, we would go out on a date with, you know, somebody to a
movie and whoever else and it was a twosome, if you would, maybe a
foursome where you double-dated.

With these generations there\'s twenty people. Everybody, whether it\'s
at a restaurant or at somebody\'s home, and a lot of it is revolving
around food, which is very cool for this world, for the food world, but,
the feelings are very different.

You know, they want more exotic food. They want more flavorful food.
They\'re not yet into the whole health aspects. With exceptions, you
have, for example, baby food. The only step in the baby food, even
though our birth rate continues to rise, is organic baby food and if you
take a look at who is buying organic baby food it\'s really, you know,
between two different groups of people. One group of people is because
women are having kids at older ages they\'re concerned about it. I\'m
not exactly sure why they\'re buying it but they\'re concerned about it.

Number two is what you have is you have Hispanic moms who are first
generation here who are buying organic baby food to avoid high fructose
corn syrup because they\'re not familiar with high fructose corn syrup.
That\'s why if you look at the lawsuit going on now in Los Angeles which
is fascinating. You know, Coca-Cola\'s bottler in Mexico is exporting
Coke into L.A. and obviously the L.A. Coke bottlers are kind of upset
and it\'s because Mexicans don\'t want Coke with high fructose corn
syrup. So, they\'re getting Coke with real sugar.

Also, if you look at what\'s going on now, especially in New York City,
Coca-Cola has purchased for Passover Coca-Cola and that\'s made with
sugar, not high fructose corn syrup and you now actually see people
buying cases and cases and cases of Coke in New York City to horde them,
to store them, because this is Coke with real sugar.

MS. SULTON: Mardi.

DR. MELLON: I have a question. I guess I\'d like to know really your
view of the role of kind of the movement part of the private sector in
kind of shaping our food system. A lot of things you talked about local
food, for example, we have someone on our committee who is a leader in
that. Our Center for Science in the Public Interest isn\'t here but
certainly they\'ve led the charge on trans fat and a lot of other
things.

I mean, how do you see these kinds of groups in terms of shaping our
food system?

MR. LEMPERT: I believe that these groups have an enormous impact. If you
look at what the CSPI has done, not to comment on whether they\'re doing
right or wrong, but, it\'s very powerful and whether it\'s Chinese food
last week, sales of Chinese food are down, visits to restaurants are
down, it\'s all about how these groups, whether it be a food company or
public interest group communicate and what CSPI does very well is they
communicate very well. And a lot of other companies don\'t.

You don\'t know how to work with the media. I can tell you that my
report on Today in working with a lot of trade associations, a lot of
companies, can be painful. I mean, I\'ll call up and I\'ll say, okay,
I\'m doing a report on blank, you know, give me your information, let me
talk to your experts, whatever else and I usually wind up with some PR
person who gives me a line. You don\'t understand, that\'s not what I
want.

And there are groups who work very effectively at that and really give
you the truth and the good science, but, too many people have their own
agendas. And, again, you have all these agendas out there and that leads
to the misunderstanding and the confusion.

DR. MELLON: Just follow that up with, you know, the other thing that
didn\'t come through in your presentation is kind of the government\'s
role in pushing bad food. The government\'s inability. There\'s a lot of
confusion in the marketplace that you could cut through very easily.
Drink less Coke. Eat more fruits and vegetables. I mean, eat less
period. Eat less. That is not a message that our government is free to
deliver because it is in some way implied to people who want to sell
more even though we ought to eat less.

But, I wonder whether there\'s a role of communicating the dynamic of
food politics so the consumers have some idea of why we have so much
high fructose corn syrup in our diet.

MR. LEMPERT: Definitely. And I want to take your three points
separately. Eat more fruits and vegetables. We have spent \-- we have
bulletproof science that says eating more fruits and vegetables is a
good thing. Bulletproof. I don\'t think one person in this room could
disagree with that. Fruits and vegetables are a good thing.

We\'ve spent I don\'t know how many tens of millions of dollars, how
many years with the Five-a-Day Program. We now have a Nine-a-Day
Program. It\'s about they have less money \-- they have more money than
CSPI. They know how to communicate. And, again, I\'m not holding Michael
or anybody else up on an altar, not this Michael, the other Michael. We
don\'t know how to communicate fruits and vegetables.

If you go to different retailers like a Wegmans, like a Whole Foods,
they know how to communicate fruits and vegetables. Their sales
represent above average sales in fruits and vegetables. They display
them. You walk into a store, Wegmans, you\'ve got people sampling them.
It\'s about taste.

You know, in our parents\' days the produce department had 20-40 items.
Today it\'s got 300 items. Again, more variety. What we need to do, if
you want to see people eat more fruits and vegetables what we need to do
is sample more fruits and vegetables in supermarkets and you\'ll see
consumption going up. Putting a poster up that says eat more fruits and
vegetables doesn\'t do it. And if you take a look at that retail
environment we\'re not working where the people are. My Food Pyramid,
and again, I\'m probably going to be attacked for this, I got to tell,
doesn\'t work for me. And if we take a look at the idea of communicating
to the people who need the information the most through a computer,
through high speed broadband internet access, neither of which they
have, to try to get them to eat less something\'s wrong here.

It was built by a committee and that doesn\'t work and \-- sorry \--
but, really, I mean, how many of you have ever gone out to My Food
Pyramid and tried to do the personalization and not gotten frustrated
and I\'m not talking about the first week when all the hits were there
from the industry checking it out. Come on, we need to be fair. We need
to communicate to people how they want to be communicated to. How do we
empower them and, again, just talking about our ages, making them feel
that eating well is good for them.

I think it\'s about communication and I think we need to take a lesson
from those great communicators on how to get that message out and make
it a single focus. Again, bad example or good example, CSPI, single
focus. They don\'t come out and they don\'t say last week, oh, Chinese
food and trans fat and soda and ten different things. Chinese food. That
makes the headlines. And we don\'t do that. We want to communicate 18
things all at once and it just doesn\'t get through a consumer\'s brain.

MS. SULTON: Adrian. We have about four more people with questions and
then we\'re going to have to move on.

DR. POLANSKY: First, I certainly agree with the traceability issues
whether it\'s cattle or whether it\'s poultry or whether it\'s spinach.
Not only do we need to find out if there\'s an issue, where there\'s an
issue, and get to it quickly and that would be an education process in
itself for people to know why maybe and where a particular spinach came
from that had a particular issue. So, I\'m absolutely supportive of
that.

In terms of information and education, a personal observation and then,
I guess, a question. I\'m kind of a technology guy. I kind of like the
Blackberries and the newest model and when I go home to the farm I have
a GIS system and I punch some buttons and the tractor drives across the
fields, you know, but it seems to me that we\'re a little bit \-- first
microwaves came out and people were kind of scared, it\'s different, and
bad things are going to happen but now we want the best, newest
microwave that doesn\'t emit bad stuff and certainly I\'ve raised
healthier, more nutritious food, safer food, but, I have \-- the thing
that I keep wondering is that \-- and we\'re kind of about at least
discussing the technology issue as it relates to food \-- it seems that
instead of embracing a better, safer, more nutritious food by utilizing
technology that we endorse it in almost every other way.

The one thing that\'s the most important to food in terms of our health
we seem to think the past is better than what we can build for the
future in terms of whether it\'s a concern with germ-resistant wheat
that we could be planting today that would eliminate mycotoxin from the
food supply. I\'m not saying it\'s not safe, but, limitations aren\'t
there with safe food but why have it at all. Why have mycotoxin issues
and so forth.

What\'s your thought in terms of the education or information to
consumers so that they can make an intelligent choice to consider better
improved options in foods that would be healthier and safer?

MR. LEMPERT: I think you make an excellent point. And if you take a look
at Time Magazine\'s article, again, probably the two most important
things that came out of that, and, again, it\'s one person and their
personal observation is that eating locally is better than eating
organic even if it does have some pesticides on it. It\'s more
flavorful, that whole thing, and, again, keep in mind that the last
paragraph of that story for those of you who read it is that he stopped
at McDonald\'s and had a filet of fish sandwich, you know, on the way
home. And I\'ve got to imagine that whatever he ate, you know, the filet
of fish sandwich is probably worse than everything else that he did.

I\'m not sure I would agree with the fact that everybody says the past
is better. I think it\'s confusion and I think that, you know, when
people think of pesticides \-- let me just use DDT \-- they really do,
it still hasn\'t come out of their brain and I think that we have a
responsibility to educate people, to educate consumers to really
understand if we want to have the safest food supply in today\'s world
with the air, with the water contamination, and so on. I mean, if you
could take a look at the *E. coli* with spinach, that was an organic
spinach farm. Nobody knows that. And, again, I like organic, I eat
organic. I am very lucky because I have an organic farmers' market
around the corner from my house every Sunday and that\'s where I buy my
fruits and vegetables.

It\'s an overload. People, as they get closer to death, life becomes
more important. It\'s natural. So, we\'ve got these 76 million Baby
Boomers getting closer to death. They\'re eating a lot better. I mean,
Whole Foods sells a lot of conventionally-grown produce as well as
organic produce and I just think that it\'s about education. I think
it\'s about technology, again, with, you know, our venture onto Second
Life for that information and being able to deliver it to people.

I just think that there\'s so much conflicting information out there
people don\'t know what to do and at that moment they feel that organic
is better for them that\'s what they\'ll choose. If in that moment they
think conventional is better for them that\'s what they\'ll choose. So,
it\'s not a simple answer and I know it\'s not the answer you want, but,
again, for me, it\'s just about clarity and communication and
consistency and probably the most important message that we need to get
out is that nutrition is a new science and that what we knew ten years
ago is different than it is today because of this new science aspect of
it.

And we haven\'t communicated that. What we\'ve said is trans fats good,
trans fats bad. Palm oil is bad, palm oil is good. And the consumer
doesn\'t know that all this science has proven it and we\'re in the
headline world and we need to learn how to communicate in that headline
world.

MS. SULTON: Carol?

MS. TUCKER FOREMAN: Thanks very much for coming. I have a couple of
questions. The first one I hope is quick and the second one I\'d like to
get some detail. You talked about the important issues for consumers
saying price, going on health claims, additives. In my surveys I\'ve
always noticed that taste generally goes back and forth with price as
number one and I didn\'t hear anything about taste. Is this a different
question they\'re responding to?

MR. LEMPERT: Yes. This is what they looked for at the supermarket
itself, not how they evaluate food.

MS. TUCKER FOREMAN: Okay. Thank you. We\'re a committee on agricultural
biotechnology. It\'s clear that there\'s a certain percentage of people
out there, none of us know how many, who don\'t like genetic
engineering, don\'t want to eat foods that are genetically engineered.
I\'d like to have your views about why. Do they think they\'re unsafe?
Is it because they\'re not natural? Is it because they don\'t have any
particular consumer benefit?

If you had foods that had \-- you know \-- most of them are commodities
that are ingredients or used in seed. If you had specific products that
were on the market as specifically genetically engineered and had
specific consumer benefit, for example, genetically engineered pig that
had omega-3 fatty acid, would that sell and would it help all
genetically engineered food?

How does this technology get a higher comfort level with the public?

MR. LEMPERT: I think that the industry has done a disservice. And
arguing about whether or not it should be labeled adds confusion and
suspect from consumers. The first step for me is genetic modification of
any food product should be labeled to give consumers a choice, number
one.

Number two. If there\'s a real benefit to the consumer, not a real
benefit for the farmer, but, a real benefit for the consumer, yes, I
believe that consumers would embrace it and would buy it. However, what
scares people the most are the headlines and going back to Prince
Charles about "Frankenfish," taking a fish gene and adding it to this or
going cross species, is what has so many consumers concerned.

If we looked, and we were talking earlier about the idea of having
cloned food enter our food supply. Consumers are very nervous about that
and we can say from a science standpoint there\'s no problem and then
consumers say, well, Dolly died. And what we need to do is we need to,
again, whatever, whether it\'s cloned, genetically modified, it needs to
be labeled to elicit trust and the biggest problem that I hear from
customers has to do with trust, whether it\'s just a food brand, whether
it\'s genetically modified, whatever, just trust. There is a serious
trust issue or food safety issue.

MS. SULTON: Nancy and then Alison.

MS. BRYSON: I really would like to know where I could get one of these
standards telling where the fish came from and \-- we can deal with that
later, but, I really wanted to get to was the comment you made when you
were talking about trans fat which is that you said that the government
said it needs to control the release of scientific information that\'s
not scientific and I wonder if you could elaborate on that because I
think a fair amount of work goes into determining or studying criteria
for what the quality of scientific information is that the government
should rely on in making regulatory decisions, but, there is there
doctrine of free speech so how do those things \-- could you just talk
about those?

MR. LEMPERT: Sure. And it\'s as frustrating for me as it is for you. I
have little or no doubt that the science that is given to this committee
and other committees on a federal level has gone through a rigorous
review hopefully. That doesn\'t mean that on a local level, local
government can\'t do other things to legislate ingredients and that
scares me.

It scares me because I don\'t know what kind of review happened before
that. Do I think that it\'s good for New York City to ban trans fat?
From a health standpoint, of course. But, do I think that they should
have? No. Or where it started in Tiburon, California. You know, it\'s
that line and I was frustrated by it as you are to understand what\'s
right because I would guess and I would probably wager that in five to
ten years from now there will be some science that comes out that says
trans fats are good.

I\'m not saying it\'s valid science. Some headline in some newspaper
that says trans fats are good and, again, I\'ll get the 5,000 e-mails
from consumers saying, you know, ten years ago you said they were bad.
So, I don\'t know the solution to it. But, I am very concerned that any
food company, any diet, anybody can send out a press release that said
we did a survey or some science. I mean, if you look at the battle that
Atkins and Ornish have had for years and probably the best radio shows
that I ever heard was it was Jerry Springer on radio with Atkins and
Ornish, you know, just like throwing chairs at each other.

There\'s no science to back it up and all kinds of things. It\'s tough
and how we control that and regulate it I don\'t have the answer, but,
what I know is America\'s health report card is suffering as a result of
it and that people, when they\'re in the store, don\'t know what to do
and I\'ll give you a great example. This goes back probably 15 to 20
years ago.

I was in a supermarket. I see a woman in her 60\'s in front of the oil
section and she is perplexed, she\'s looking, whatever. I said, can I
help you. She said, do you work here. I said, no, but, you know, I know
a little bit about oils. She said I just came back from the doctor. My
husband has high cholesterol and the doctor said to use olive oil, but,
I\'m confused. There\'s light olive oil, there\'s extra virgin olive
oil. I don\'t know what olive oil to use.

So, I said, well, tell me about how you cook and whatever else. To make
a long story short, this woman never used any oil. Just broiling. And,
you know, the doctor said use olive oil. Okay. So, now I\'m going to add
olive oil to my husband\'s diet, that\'ll help, and I think those are
the kinds of issues that applies to me as well and I think we still have
today.

If you surveyed 1,000 people and said there\'s light oil, light olive
oil have less fat than regular olive oil you\'d hear a resounding yes,
it has less oil.

MS. SULTON: Alison.

DR. VAN EENENNAAM: Yes. Actually, the comment you made about the trans
fats and there\'s studies out there showing trans fats are good for you
right now and I think it\'s not as simple as, you know, you can\'t make
it out and I guess that brings to my question which is what do you use
as the basis for Second Life when that consumer goes in there and asks
about, for example, you brought up mad cow disease. Where are you
getting your data from and, you know, using that to educate the
consumers?

MR. LEMPERT: In the case of Mad Cow we rely on USDA information versus
National Cattleman's Beef Association which I see as a difference not
necessarily today without being political.

DR. VAN EENENNAAM: So, you use government site sources for your
educational?

MR. LEMPERT: Yes, and, you know, again, besides that, then when somebody
says what can I do about it, you know, we will say, you know, that
eating organic beef you have a better chance of avoiding mad cow because
of the feed than \--

DR. VAN EENENNAAM: And that\'s from the USDA government?

MR. LEMPERT: No, that is not from the government.

DR. VAN EENENNAAM: Where is that coming from?

MR. LEMPERT: That\'s coming from the other information that we\'ve
collected.

MS. SULTON: Thank you very much. It was an interesting discussion. We
appreciate it. Thank you.

(Audience applause)

DR. SCHECHTMAN: We will take a break now and for committee members this
is probably a good moment to celebrate Lisa\'s departure. I will pass
around the chocolates.

(Whereupon, a brief recess was taken)

MS. DILLEY: You should have a copy titled AC21 March 26th, 2007. This is
not to replace the document. It\'s a supplement and at some point needs
to be integrated post this meeting as to some of the things we talked
about yesterday.

So, for example, in the introduction that people definitely wanted to
see there, the charge from the Secretary, and the working definition and
then some of the points to be added to an introduction that may be over
the course of working the paper and some other things you want to pull
up in the introduction, but, from yesterday\'s discussion we tried to
capture some of those and then we had moved into factors enabling
coexistence, re-titling that section that some things are working and
enabling coexistence.

And, again, these are supplemental; either some particular variation and
bullet points or factors that are in there but not to completely replace
them. We didn\'t have enough time between yesterday and today. So, we
need to do that post-meeting. Just wanted you to look at that and see if
there\'s anything glaringly missing having had a chance to think a
little bit about it, see if there are any additional points to be made
or added to the factors enabling coexistence and then we\'ll spend some
time looking at what\'s now titled, what\'s not working today, and
potential in the future and work that section a little bit, along the
lines of yesterday trying to clarify what\'s in there, add to it, revise
it, work through it.

For those of you who may not have been in the beginning discussion,
thinking about a more brief paper that does not go into recommendations.
We\'ve already talked about moving that throughout our discussions comes
out, but, that\'s not our goal. Our goal is to leave it in and
understand and articulate what\'s happening, how coexistence is either
being enabled or challenged and try and make some observations about
that too.

I think one of the things that came out yesterday was wanting to, with
the help of the community, help foster and enhance coexistence, and, so,
trying to make some observations along those lines. Again, see if people
had reactions to very abbreviated summaries from yesterday, wanting to
add to it and then we\'ll move into the document.

Questions? Take a second to look at it. Anybody not have a copy by the
way? I think I got everybody. Stephanie?

DR. WHALEN: It came up yesterday. We were going to have some different
systems going on. You have the commodity group which has the traits and
then you have the specialty crops which really don\'t and so, you know,
where is the coexistence working and not working, if it not working
because I think there\'s a little confusion like there\'s GMO stuff out
there everywhere and it\'s not on the fruits and vegetable side at all.
It\'s not a problem for papaya so I don\'t know about squash, but I can
talk about papaya and we can get into the Japanese market with non-GMO
and the mix of GMO products, you know, since we wouldn\'t have any
papaya at all we didn\'t have GMO to reduce the population so for that
instant incidence of GMO in the fruit is not a coexistence problem.
It\'s working.

It\'s been worked by that industry.

MS. DILLEY: So, to me, what you\'re saying is it\'s a more richer
detailed picture of what does it mean to these different commodities, to
these different production systems with coexistence; where are they
closer than apart; where is it more of a \-- being more descriptive
about that.

Yesterday we talked a lot about what do we do for a fix for that; how do
we do that and, you\'re right, we\'re not quite there yet in terms of
how we describe that picture.

Leon.

MR. CORZINE: Abby, a little process question. Is your intent that these
bullets, this is the wording or these are just more the ideas you\'re
trying to get?

MS. DILLEY: Ideas. But, this is my wording before I had my first cup of
coffee and my second. Yes?

DR. SHURDUT: I\'m assuming you\'re looking at this whole paper, not just
the introduction?

MS. DILLEY: Yes.

DR. SHURDUT: Just a question on the fact that gets back to our
discussion around AP and critique there. I thought we talked a little
bit about taking the actual word AP out instead of market-based
threshold just so it went to policies and all that.

MS. DILLEY: Yeah, good idea.

DR. SHURDUT: And the other thing too, and this is more a question to the
grain folks and the food folks is it doesn\'t necessarily have to be a
threshold. It\'s an acknowledgement of an acceptable level of
adventitious presence but it may not be a number or threshold. So, here
you\'re talking strictly in threshold so you may want to tighten that a
bit.

MS. DILLEY: Okay.

MR. KALAITZANDONAKES: Maybe, Abby, just adding the word standards and
thresholds, generalize rather than a number.

MS. DILLEY: Okay. Anything that\'s not captured there at all? Yes?

DR. CARDINEAU: Well, we spent a lot of time talking about the
farmer-to-farmer cooperation. I don\'t really see this here.

MS. DILLEY: We did. That\'s true and I think, I mean, to me, in terms of
the coexistence has been \-- there\'s a framework out there that\'s been
in existence for a long time and some examples of that would include the
farmer-to- farmer programs. So, you\'re right, it\'s not there on the
paper. It does need to be integrated. A lot of the same things we talked
a lot about where it is, where it isn\'t trying to give more description
to that.

I think that\'s probably best done maybe with input from you all
directly rather than me trying to do that, but, we\'ll have to figure
out how to capture it all in the examples to illustrate; give more
illustration to it.

Mardi.

DR. MELLON: I don\'t quite \-- does this mean that the introduction has
been reduced to simply having the charge, the working definition and
then both?

MS. DILLEY: No, it\'s going to be \-- some of these are the major themes
that I think people thought were missing in the current draft so this is
supplemental to and it needs to be integrated and I haven\'t done that.

DR. SHURDUT: Just one thing that may be missing from yesterday is we
talk a lot about the grain and testing and verification and I know on
the flip side on things that are not working or perceived not working. I
think there\'s still a diversified seed supply. The one factor that
allows it to work is that you still can get your organic feed, you still
can get, you know, the seed, the purity, depending on what the market
bears, but, maintaining a diversified or having a diversified seed
supply I think enables coexistence.

MS. DILLEY: Other thoughts in terms of what we did talk about yesterday
that would fall under factors enabling coexistence? Other examples that
are missing or are working and why? I thought that\'s what we hoped to
capture is a little description of what\'s enabling coexistence, you
know, and why. Anything else in the document that needs any further
clarification that we need to talk about? We got through most of that
section A. I wanted to see if anybody had additional comments. Okay. You
want to shift gears and go into the next section?

Challenges or what\'s not working but we\'re doing factors enabling
coexistence within some kind of parallel language. Adrian?

DR. POLANSKY: I alluded to the fact just before the break that one of
the areas where I think there needs some comment or bullet point and I
think what this has been mentioned about papaya and so forth, there is
four or numerous reasons, risk aversion among some others, some
consumers not wanting GM in the food that they eat, has had some
consequences in terms of consumers and producers both not having
available choice in terms of whether it\'s GE potato production and/or
consumption that would have benefits both potentially at least so it
seems to me that there is at least an issue there in terms of there not
being source available in some cases, particularly in fruits and
vegetables, but, I think it extends to the food crops and I think that
needs to be in the document in some way.

MS. DILLEY: So, I\'m trying to capture what you\'re saying, Adrian. I
mean, before I figure out where it goes it\'s more of a notion that
there are products out there that have some benefit that aren\'t
available.

DR. POLANSKY: That aren\'t available because of there\'s a concern I
think among the food processing and food delivery system that there
would be a reaction by some consumers who would have a negative impact
on their brand or other issues and so that there\'s not market access
even though there would be some consumers that would purchase those food
options and growers that would produce those options.

MS. DILLEY: Sarah?

MS. GEISERT: I think what that translates to is I think it has to do
with marketing and I think if you look at maybe what\'s not working is
how do you support, you know, potentially new markets so if you look
back and said organic many years ago, you know, organic was a new market
as having movement that generated interest in the product. You know,
that\'s part of the discussion and, you know, have we supported it
appropriately and I think what Adrian is saying is certainly companies
aren\'t going to go advertise and market and pay the expense on a market
shelf if there\'s not a market for it.

And how do you encourage if the people want GE potatoes how do you
encourage a small processor to take that step to try it in the
marketplace and I think that gets into, you know, how do you support
innovative marketing ideas, innovative, you know, new market systems
when the market is picked up by the large processors.

And, so, that may be where you look at local sourcing or you look at
some of the things that are on trend, what does that mean. Well, how do
you get your arms around the appropriate level of support that feeds
these ideas to see whether there really is market interest in GE
potatoes?

Just like organic, we didn\'t get into organic until we began to see
that there was a trend and, so, I think, you know, that could be
encouraged perhaps as another way to look at it.

DR. POLANSKY: Yeah, it\'s the same issue. It\'s the same issue but with
different products.

MS. GEISERT: Does it have a role and is it not working?

MS. DILLEY: Stephanie and then Nick.

DR. WHALEN: Well, even before you get to the marketing part of it I
think there\'s a significant hurdle in the regulatory part of it with
specialty crops. In the two workshops I attended in January that\'s the
main concern. Specialty crops have changed sitting on the shelf, either
at universities or small companies and the question is how do get
through what is exactly the regulatory process because it is kind of an
interactive process with the agencies and so it\'s very difficult to
define exactly what the cost is going to be to get through that process
and then of course the market side which has been touched on already.

But, before that it\'s actually what does it take on the molecular
biology side and the trials and the studies to get to the point where
you can actually market, and, so, the specialty crops, the big companies
have put in what they feel is needed in that or to give the agency
comfort level of that magnitude of information how much is really
necessary to improve the health and safety especially if you talk about
a similar event that\'s already in the food process or even a new event.

So, there\'s a huge problem there that it needs to be addressed as not
working.

MS. DILLEY: Michael.

DR. SCHECHTMAN: An observation. Without attempting to disagree with
either of the last two points I\'m a little concerned about moving the
discussion off of coexistence and coexistence of things that are in the
food chain and things that can\'t coexist because they\'re not there and
I just wanted you to think about to what extent this is broadening a
discussion beyond the physical parameters of coexistence which is not to
say the points are not important.

But, if we\'re trying \-- we talked about the need to be fairly focused
in what comes out and I know this is not in any way to take away from
the issues because certainly one of the topics that this committee has
entertained working on is what do you need to do to help the most
important specialty products that are going to give the biggest bang
before they actually get to market and that\'s something I don\'t know
we\'ll actually get to work on, but, it\'s something to recognize as a
very important issue.

But, I\'m just trying to think about how to help the committee focus on
the things that are, in fact, out there or when they\'re out there how
they coexist.

MS. DILLEY: Nick and then Russ.

MR. KALAITZANDONAKES: So, Michael, to your point, I think this is a very
good issue that you\'re raising but also related to the point that
Adrian raised. And I believe Adrian\'s point is actually a very good one
and should be included in the discussion because it is coexistence
focused.

For instance, Roundup Ready wheat has not come to the market and
Duane\'s organization was very involved in preventing Roundup Ready
wheat from even being grown or existing in the marketplace in the
context of around coexistence with conventional wheat and potential
damage in the marketplace.

And, so, the coexistence issue drives the decision to bring the product
to the market or not. And we have seen the same type of action, for
example, in Europe where food manufacturers and food retailers have
prevented products from coming to the market despite the fact that a
labeling law is already in place. You can find labeled products, right.
And in my view, this is also related to some of the market failures that
we talked about earlier.

So, I think it\'s related. I think it\'s worth discussion.

DR. SCHECHTMAN: Yeah, I think the one thing I just heard that was
different from what you said that maybe focuses it slightly differently
is that concern about difficulties in coexistence are inhibiting the
deployment of product. I think that focus again relates it more back to
the particular discussion.

MR. KALAITZANDONAKES: And I think Adrian\'s point is we\'re assuming
difficulties around coexistence. It\'s not realized. And I think that\'s
what Adrian\'s point is that assumed difficulties.

MS. DILLEY: Russell and then Leon.

MR. KREMER: I don\'t know if this is the right time to discuss this. We
are talking about number E up under number 1. I\'d just like to mainly
flush out one point and I think Michael, that was your bullet point,
wasn\'t it?

I still think talking about these bullet points is over the lack of
education in research as well as lack of information, both producers and
buyers, and about the \-- you know \-- about organics and specialty
crops and products and I know that the presentation yesterday some of us
were impressed there was maybe a little bit more research about that was
going on with USDA, but, still a far cry short of that as well as, you
know, as well as education.

There\'s other reasons why we\'re losing the import/export battle
besides the price that other countries are charging in my opinion and I
think the education and research needs to be included in there as well
as concerns about international supplier or global supply. You know, one
of the comments yesterday, I think, was that, you know, people didn\'t
realize that products are being USDA organically certified in other
countries and so maybe some transparency is lacking here or, you know,
could be an origin of labeling or something, I don\'t know, but, I see
that included in there as a concern or a problem.

DR. SCHECHTMAN: Can I ask you one clarification from you? Were you
talking to a particular bullet that was here or are you adding a new
one?

MR. KREMER: I was modifying the last bullet of number 1.

DR. SCHECHTMAN: The last bullet of number 1.

MR. KREMER: The last bullet of number 1 and perhaps adding another
bullet in reference to issues with international supply of organic and
specialty crops.

MS. DILLEY: Leon?

MR. CORZINE: Well, I agree with Russell. I think that, you know, I
don\'t know how many people in the room knew that as far as products not
grown in the U.S. have USDA labels on them and whether that is a concern
on the whole thing about information, right, is what you\'re talking
about, Russell?

The other thing what was brought up by Adrian and Stephanie, and we can
do it, Michael, without expanding just one bullet about, you know, the
regulatory and information problems we have with bringing forward new
products, you know, and that is an issue and we don\'t \-- maybe if we
can do that without expanding it, that is an issue with new products,
whether it\'s really especially in the biotech arena because it stops
the research, it stops everything and we\'ve got a lot of examples.

MS. DILLEY: What I guess I\'m trying to understand, Leon, and maybe you
can help me understand it is I can see how that\'s a problem for new
products or a particular stream of products, but, I don\'t understand
its relevance to coexistence.

MR. CORZINE: Coexistence? Well, if you\'re going to coexist it doesn\'t
matter if it\'s new biotech product or new organic product or new
conventional product. You aren\'t given the opportunity to coexist, so,
that is an issue with coexistence and not giving the opportunity to grow
that new conventional product or that new biotech product or that new
organic product because of the problems with bringing it forward. And it
all gets around regulatory issues as well as information issues.

MS. DILLEY: Okay. So, does that mean that the best case scenario is for
there to be a lot more products of all conventional, organic, and does
that make coexistence more successful? I\'m just trying to play that out
because I\'m trying to understand.

MR. CORZINE: I think the place for USDA is to just back to this like
maybe to Russell\'s bullet, Russell\'s and Michael\'s bullet is
information from USDA. You know, we need to stop the flamethrowers on
new products coming forward and be able to get accurate information out
and our presenter a while ago talked about that as well. It\'s really an
information issue and USDA could help with that.

MS. DILLEY: That\'s why I\'m trying to understand whether that\'s an
information thing or that\'s the market working. That\'s what I\'m
having trouble with. Michael Dykes and Adrian and Mardi and then
Stephanie and Duane.

DR. DYKES: On the point Russell made and Russell picked up on, I think
there\'s just so much misunderstanding about the whole organic program
all the way from denoting safety to the requirements for being certified
to the fact that it\'s international and can still be called organic;
that people are calling salmon organic when there are no salmon. I mean
the misinformation, this problem especially with the state legislatures
is absolutely rampant and no one, no one wants to speak to this with any
kind of facts because of putting political statements around it.

But, it is absolutely huge.

MS. DILLEY: Well, I think the misinformation generally makes coexistence
\--

DR. DYKES: The only thing about the organic thing because there seems to
be no real place to go back to very many facts from other than the
organic rule and there\'s just no one speaking to it so anybody says
whatever the organic rules are that they feel like they should be,
whether they are or not, and that\'s the kind of the rule today.

What happens is a lot of people get slightly misinformed and then on
production you kind of get left holding the bag.

MS. DILLEY: It goes back to Randy\'s point yesterday in terms of the
capturing value and that you need the ones who are trying to capture
value need to pay but if your misinformation makes it that much more
difficult to capture value, I guess. Is that how \-- to me, that kind of
makes a link to it doesn\'t allow the markets to work the way they\'re
supposed to work because if you have misinformation then it\'s that much
more difficult to capture value.

DR. DYKES: Well, you have people capturing \-- I think you have people
capturing value. If you\'re a labeling examiner for organic you\'re
capturing value in how you\'re capturing it. And it\'s misleading,
deceptive, so, a lot of people capturing value. I\'m just saying that
most of it is \--

DR. MELLON: But, they\'re not using the seal. They\'re not using the
seal. Let\'s not be \-- they\'re not using the federal seal, the federal
organic seal. They are not doing that with organic salmon. They\'re just
using the word illegally \--

MS. DILLEY: Yeah, organic.

DR. MELLON: \-- in conjunction in nearby as to where salmon are.

DR. DYKES: I didn\'t mean to say it\'s all behind the seal. I\'m taking
the whole category around organic. The rules of the road are so
misunderstood, ill-informed, whatever it is, anybody\'s rules apply. And
I think what happens is there are a lot of people capturing value. I
mean, a lot of people are paying for things that they think they\'re
getting when really and truly they\'re just being told is a slight.

MS. DILLEY: Adrian and then Mardi.

DR. POLANSKY: I apologize for being very unclear when I spoke last and,
in fact, led for adding some clarity to that. If, in fact, we believe
that coexistence does work and we think that\'s sort of where we\'re
kind of going here to at least some degree, if coexistence was then in
GE wheat, shouldn\'t be an issue in the marketplace because we should be
able to segregate it and those that don\'t want to buy it ought to be
able to buy non-GE wheat, whether it\'s Roundup Ready or whether it\'s a
wheat that eliminates disease issues, so, I think it is very, very much
related to coexistence.

And if we believe it can work then this, I think, relates directly to
the discussion here.

MS. DILLEY: Mardi and then Stephanie.

DR. MELLON: Well, I mean, it seems to me that that is a legitimate
point, a legitimate outcome of coexistence although I think we need to
\-- I mean, it\'s the point, I think, those kinds of problems are
problems that are export markets more than domestic markets as far as I
can see. I mean, the wheat growers are primarily exporters and they were
afraid of the impact on their export market.

So, if we\'re going to describe that issue then I think we need to be
very clear about what it is. The other thing I\'d like to take on is
kind of Russell\'s point is I mean if we\'re going to \-- it is true
that new products need resource and that there are big market hurdles to
be overcome and those of us who are interested in organic that are
interested in local we see ourselves as, you know, having huge mountains
ahead of us in terms of providing the farmers and the folks who are
interested in getting into it, consumers, but, we need to establish
physically a whole new supply chain in the U.S.

And I\'m for helping folks do that. My observation on that though is
that comparatively speaking the biotech folks have had so much more of
the resources of USDA over the last 20 years than, for example, the
organic people or the local people that it\'s not even \-- you know \--
it\'s \-- I mean, I don\'t even understand really in many ways why the
department is willing to expend so much of taxpayer money dealing with
all the problems that come out of biotech. That\'s what we were told
yesterday by Mr. De Haven. The smallest unit within USDA causing us the
most trouble. Most of the problems that we\'re dealing with are coming
out of this issue.

So, it just seems to me, I mean, whether we \-- if we\'re going to talk
about resources I think we want to talk about the fact that the
resources in terms of allowing new products come forward and coexist.
Right now our disproportionately \-- at USDA have been
disproportionately kind of put it service of moving biotech forward and
I\'d like to, while I don\'t think it\'s an inappropriate thing for the
USDA to do, I surely would not want to be \-- you know \-- I will sign
on to something that says we need to push it even more unless it\'s done
in some \-- there\'s some equity with the other kinds of new products
that I really think consumers would like, you know, would like more.

So, I\'d like \-- if we\'re going to address that issue I\'ll be looking
at it from a point of view of balance.

MS. DILLEY: So that\'s number 4 on the document right now which supports
diverse agriculture. Stephanie and then Duane.

DR. WHALEN: Okay. It seems that things that are not working today. I
think, again, maybe it goes back to misinformation that\'s out there
because if the information out there that coexistence cannot work which
is really what we hear in our community and we\'re saying that it does
work or the system really does work and the things that are not working
are about misinformation that gets out in the general public that it
can\'t work.

And, so, there\'s that problem which is basically an information problem
as being communicated and that USDA in this thing about coexistence
isn\'t working then we\'ve got to get that communication out so it can
work.

MS. DILLEY: So, are you mostly saying a higher profile of things are
working in coexistence?

DR. WHALEN: Right. That coexistence, we\'re saying that it actually
works. Some things are not working and we\'ve got the information out
there that it will not work.

MS. DILLEY: Duane and then Sarah.

MR. GRANT: So, we\'re just kind of jumping around, I guess, and hang on
a lot of different issues. I wanted to hit on probably maybe two or
three then. Back to Adrian and Stephanie\'s point. I think if you really
want to \-- you know \-- if we want to articulate what\'s not working
about letting new GE products come into the marketplace it\'s kind of
sketched out in kind of regulatory requirements, both domestically and
internationally, create a barrier to the entry for new GE products,
thus, preventing coexistence.

I think that\'s really the issue that other non-GE products simply
don\'t face. They don\'t have that regulatory barrier, that regulatory
hurdle that they have to clear before they can even have an opportunity
to coexist in the marketplace and for small crops, as Stephanie pointed
out, that is a very real, very tangible barrier that\'s extremely
difficult and in many cases impossible to overcome.

Some of what Adrian brought up I think is captured in No. 7 and when we
get to it we can really, you know, dive into that. Over refreshments
last evening we kind of re-coined this as a monopoly of dominant
preference and it\'s a real issue in the marketplace that the dominant
preference can prevent and exclude and prevent opportunity for something
new to come to the marketplace. That\'s what we saw in wheat really.

That\'s when you really boil it down that\'s the dominant preference for
non-GM excluded, effectively excluded, the opportunity for GM wheat to
come to the marketplace.

DR. DYKES: Isn\'t that really the case for rice today as well?

MR. GRANT: It is the case for rice, it is the case for potatoes, yeah,
you\'ve seen the end of that, but, you know, there\'s potatoes, wild
rice, barley. We can go on.

MS. DILLEY: Sarah and then Guy.

MS. GEISERT: It strikes me that we almost need a bullet point on the
barriers of entry because I think what we heard yesterday, some of it
was organic, and why is international a better \-- a source that\'s used
today. It\'s not just labor. If you have don\'t three years you have to
set aside your land and that risk. I mean that\'s a barrier of entry to
see the local. You know, maybe that\'s why you see local sourcing
become, you know, more common versus organic and, so, I think research
that you\'re talking about, you\'re talking about climbing hurdles for
entry for new products and they could become in terms of research
boundaries. They could be regulatory hurdles because regulatory for
organic is in your set-aside program. That is a regulatory requirement.
So, that\'s a barrier to entry.

I think marketplace, to me, it is all about barriers to entry and it is
difficult. It always has been difficult, maybe more difficult now given
coexistence and the competing need for dollars or resources. There\'s
barriers of entry.

And then I was just going to comment on organic. For all those in the
business of organic we know the regulations well. You know, they\'re
truthful and non-misleading and adulteration standards are the
requirements for products as they have been for decades and decades of
moving goods around the globe. We have to overlay organic requirements
and those in the business of putting organic certification on the
products I believe there\'s always those who don\'t do it well. That\'s
today in the marketplace, is the people don\'t do GM as well as what
some of us would say, and I think because you don\'t know the organic
requirement don\'t assume the worst about them.

You have been sourcing products around the globe for decades. And now
you have a new hurdle. You have organic certification and while it may
seem all queer and non-scientific, I do think you have to give USDA the
benefit. They\'ve put a lot of work into it and those who do the
certification and sources around the globe understand the requirements.

So, again, I think just because you don\'t know or we don\'t know
doesn\'t mean it\'s all good or it\'s all bad. Could it be better? Every
regulation could be better so for those who do do organic they take it
seriously. They do know the regulations and they still have to meet the
current FDA and USDA requirements. So, the main point is I think there
are barriers to entry.

MS. DILLEY: The point makes sense to me and I guess the one piece that I
understood in terms of barriers to entry and how that affects
coexistence, is competition for dollars and if you have \-- because
there\'s barriers to entry to anything new. That\'s what I didn\'t
understand in terms of how that affects coexistence. That\'s true for
any new product but in terms of coexistence that sets the dynamic of
competition among the different agricultural production streams then I
can see how it would affect coexistence.

MS. GEISERT: The regulatory hurdles, you know, with new GE could be more
difficult where the organic side may say well that\'s pretty high for
three years.

MS. DILLEY: Yeah. Yes, it\'s higher, yes. Yes. Versus conventional.
Okay. I get that now. It took me a while but I\'m starting to get it.
So, Guy, you\'re next and then Nick and then Daryl.

DR. CARDINEAU: We were clearly discussing this phase of entry, but, by
the time it gets to me to say something we\'ve covered a lot of it, but,
in relation to Adrian\'s comment and then Duane\'s follow on, I think
it\'s important, and this, I guess, address Mardi\'s comment also, to
bring a GE product into the marketplace from a regulatory perspective
costs tens of millions of dollars and perhaps we\'re now approximating
one hundred million range. Maybe Michael or Brad can address that.

But, that makes it virtually impossible for any small developer to bring
it to the marketplace. You\'d have to pretty much be a big guy to do
that and that\'s one of the reasons why the crops we see in the
marketplace are major commodity crops. Corn is the largest acreage crop
in the U.S. Soybean is right up there. Cotton has the highest insect
pressure so that\'s why it\'s attractive.

You\'re not going to see vegetables because there\'s just not enough
dollars in it right now with the regulatory profiles the way they are so
if you\'re going to bring these types of products into the marketplace
in a competitive fashion the regulatory issues associated with them are
going to have to be reviewed in some fashion. Otherwise, it\'s just not
going to happen.

If we look at wheat, we might be very attractive to the farmer for
growing, but, if he doesn\'t have a market because somebody says no, or,
rice, these are huge issues for us so coexistence can work within the
United States. But, if our export partners are not willing to take these
products then the farmers are not going to be able to take the products
internally in the United States either.

So, there\'s this internal conflict that we have to deal with and I\'m
not sure how that\'s going to be addressed but the barriers are real and
they involve costs to a large extent and those costs could be spread out
over a lot of different areas.

MS. DILLEY: Nick and then Jerry.

MR. KALAITZANDONAKES: I\'ve been trying to de-synthesize what\'s already
been discussed and I think \--

MS. DILLEY: And have you? Because you\'re always ready. No? All right.
Jerry?

MR. SLOCUM: I\'m going back to your point. I\'m struggling. It seems to
me that we\'re confusing barriers to existence with barriers to
coexistence.

MS. DILLEY: Right. That\'s what I was getting at.

MR. SLOCUM: We don\'t need to do that, I mean, because for something
that has coexistence issues, it must exist and before you have, more
land is not a barrier to coexistence. It\'s a barrier to existence of
organic. Once you clear that hurdle then you can worry about
coexistence, but, you have to exist first and we\'re mixing these apples
and these oranges and we\'re going to have one big, big, big basket that
we need to do some further delineation there and it has to exist before
it has coexisted.

MS. DILLEY: Right. Right. Nick?

MR. KALAITZANDONAKES: So, back to this issue about existence/coexistence
and how they are related barriers for entry. Part of the discussion that
I think is relevant to us in the context of coexistence is examples like
Roundup Ready wheat, where the consideration on the assumption of
whether the two kinds of wheats could coexist without creating market
disruption led to the decision not to promote or not to allow it to
happen in the marketplace.

A second, very important component, and that\'s where market comes in,
is when you actually have determinant players in the marketplace that
can prevent single-handedly a new product coming in. So, in the case of
potatoes, some Wheat Growers Association in the case of wheat, and so on
and that is a classic case of market failure when monopolistic powers
exercise preventing it from happening.

So, that is a case where coexistence is, or lack of possibility of
coexistence is assumed, market power is exercised and coexistence
doesn\'t have it. You have to have it before you can exist. So, I think
those types of situations are important to mention because they are
market failures. Policy can be exercised and have an influence and
coexistence can be promoted. I think it\'s important to mention and
separate it from potentially adverse to entry that qualitatively might
be somewhat different.

MS. DILLEY: I\'m still struggling with market failure because I think
one person\'s market failure is another person\'s wealth. I\'m not an
economist.

MR. KALAITZANDONAKES: So, market failure is a situation where the
government can step in and do better than the market can do by itself,
be more efficient, right. So, even a classic case of market failure is
where you have, for example, market power being exercised. That\'s why
we have regulations about market power, right. That\'s why we have FTC
and others regulating markets and the exercise of market power.

In this particular case we have two classic examples where market power
is being exercised, in one case by wheat growers, in another case by a
dominant buyer like McDonald's.

MS. DILLEY: Stephanie, then Michael, then Duane.

DR. WHALEN: I\'d kind of like to go back to what the presenter this
morning was telling us and coexistence, trying to say what isn\'t
working with coexistence with existing products is the constant
hammering in some segments that coexistence cannot work without a better
communication from this government or whatever that says coexistence is
working because all that\'s occurring out there is that it cannot work
focused by those that don\'t want it to work.

MS. DILLEY: Michael and then Duane.

DR. DYKES: Yeah, a couple of points. I think the point that Adrian
started with and Nick was talking about, I think is pretty well
explained in No. 7. I think rice is another example of dominant players
taking the position even on the domestic utilization for rice even
though the rice is approved it won\'t be accepted.

Your point on organic, I\'m sure you guys are doing things that you need
to do on organic. No doubt about it. But, we have people testifying in
state legislatures who are organic certifying agents talking about
people losing their certification over biotech. It just isn\'t true. It
just isn\'t true. Put out a letter saying it\'s not true. Those are my
points.

I\'m not talking about the companies in following the rules on the
shield. I\'m just talking about the rampant misinformation that\'s out
there about what is and is not organic and there\'s no one addressing
that. That\'s what I wanted to respond to your comment, not directly to
General Mills. I\'m sure you guys are doing the right thing, but,
everybody\'s not General Mills.

MS. DILLEY: And you\'re glad of that.

MS. GEISERT: Misinformation is always a challenge. And biotech has
misinformation, organic has misinformation and that is when government
steps in, how do you regulate misinformation to truthful.

MS. DILLEY: Duane.

MR. GRANT: I really liked your comment about you have to exist before
you coexist and that\'s a nice little catch phrase and it kind of got me
thinking. I disagree with it. I think that\'s too high of a barrier for
what can be included and, of course, this is one of our papers, I don\'t
know which one, it was actually pointed out that the Cold War term that
kind of evolved talking about how we were going to not just kill each
other with the alternative. It\'s just kind of an ethnic cleansing
concept and that\'s really \-- I mean if you don\'t allow something else
to exist, yeah, you don\'t have to coexist, but, there is that, so, \--

DR. SCHECHTMAN: Can I make a suggestion? I think I\'ve heard on both
sides from that there are reasons to include some of this discussion on
what Jerry called the existence part but maybe it might make sense
organizationally to separate the existence from the coexistence items
just for clarity of how the paper reads. Do people think that makes
sense?

MR. GRANT: Michael, I would agree with you on that. I think it\'s a
concept and I think we can wrap that up probably in one bullet, but, it
is a separate bullet that the tangible issues of coexistence of things
that are already there. It\'s even a different issue than what we\'ve
\-- it\'s even a different issue from number 7.

DR. DYKES: It\'s different from No. 7?

MR. GRANT: I think it is different, yeah, yeah. For example, number 7
wasn\'t a barrier because of eventually costs, for example. Number 7 is
pretty much directed at a monopoly preference issue.

MS. DILLEY: I\'m still trying to understand this because to me if you
throw that out then coexistence is more functional, it\'s everything,
every new idea that\'s come into the marketplace. I don\'t see how the
structure can keep up with that. I\'m struggling with this concept.

But, Leon, then Mardi, then Carol.

MR. CORZINE: Well, I just wanted to firm up what Michael touched on and
Stephanie talked about that is a real thing and that is that information
about coexistence because there\'s a segment out there, there\'s those
that get out beyond the edge in saying that we \-- a lot of this
information about \-- about we cannot coexist and we are and that is a
real thing, I mean, Michael touched on. We hear people testifying in
claiming that they\'re something that they\'re not and it gets back to
that bullet about information, lack of information about coexistence.

There\'s a threat to coexistence. If you want to go back and really talk
about how we focus on coexistence, that is a threat to coexistence
because of the lack of information and misinformation about that.

MS. DILLEY: Mardi and then Daryl.

DR. MELLON: Well, I think it is useful to have information about
coexistence, but, I think if we \-- you know, that there\'s a lot of
misinformation out there about a lot so if we walk down that road we\'re
not going to find ourselves only correcting one information about kind
of one approach. That\'s kind of my same reaction to the notion that
somehow monopoly players in the marketplace are a problem. If the
monopolists had gone the other way I doubt that we would be hearing
anybody complaining about the McDonald monopoly.

I have a lot of problems on monopoly in agriculture and I think Russell
has, you know, an order of magnitude of problems about any that I would
come up with. So, if you want to take on \-- I mean, monopoly again will
reach in a lot of different directions as will the notion of market
efficiency. You know, from an efficient standpoint do we need a Hawaiian
papaya industry at all? There are a lot of papayas around the world. I
mean, its healthy papayas are probably \-- you know \-- we probably have
enough if we don\'t have Hawaii.

It is not market efficiency that drove us to save us the Hawaiian papaya
industry. It\'s because we\'re Americans and if there are problems and
we want them to do well and that \-- I mean, and that instinct, you
know, it runs counter to kind of the broadest view of a free market
global trading economy and I mean I think we need both. I think we need
to exist in a global marketplace but we ought to be very comfortable
trying to, you know, use a number of tools to advantage American
farmers.

I mean, that\'s where I would like to be, but, I just think we need to
acknowledge that if we start talking about things as market failures.
What a lot of us would like to do arguably, you know, is not in service
as the most efficient market.

MS. DILLEY: I think Daryl and then we\'ll walk through each of the
bullets under the six sections and see if there are any additional
comments because I have a hard time bouncing around to a lot of
different topics and maybe we could go one by one and take comments on
each one. Daryl.

DR. BUSS: I was going to comment certainly back to the
existence/coexistence issue and certainly a good case has been made to
include a bit of that discussion about existence but I\'m not sure it
fits well within the discussion of coexistence. It would seem to me to
be better as a short paragraph that would occur before we launch into
the factors enabling coexistence and the factors limiting coexistence
and then I think it could be its own set-aside, stop, with a bullet
underneath with some other point.

MS. DILLEY: Yeah. Good idea in terms of mixing existence and
coexistence, yeah.

DR. BUSS: It muddies the water.

MS. DILLEY: One more comment and then we\'ll go start back on one.

MR. KALAITZANDONAKES: Yeah, I guess my comment is related both to what
Michael\'s said and what Daryl said in that as an economist we have
equal problem with what Russell said, for example, on market structure
in seed availability. So, if we have a monopolistic society in market
power in not having a good seed supply and we have documented that to be
the case then, you know, that is a market failure as much as it is on
the buying side so both of those are market failures that relate to
market structure and I think those are both worthwhile to mention and
articulate.

So, I think I would put it in as a separate bullet in what is a limiting
factor rather than a introductory statement much like we have a
discussion seed availability because of market structure in that package
discussion.

MS. DILLEY: Okay. Yeah, Leon?

MR. CORZINE: I just got to make one point. It\'s going to bother me a
lot when I go home if I don\'t. Maybe I misinterpreted you, Margaret,
but, I think as a USDA committee we can\'t be talking about \-- well,
one issue, the fact isn\'t right on the biotech because the biotech
industry helped papaya offshore outside the United States too, but,
we\'ve got to be careful about making comments that well maybe the
papaya industry in Hawaii is not important.

DR. MELLON: I\'m trying to say it is important. It is important because
it\'s an American \-- my point of view is that I\'m interested in the
welfare of the American economy, the American farmer, the American food
system. I\'m unashamedly interested in that. Sometimes I feel that that
interest in the welfare of our farmers it is kind of lost and in a
rhetoric of free market global trade which attempts to say that it
doesn\'t matter where it came from and that you will only get it right
to participate in the international arena if you have natural advantages
that you can exploit and that beyond, you know, allowing folks to
compete in that market on those natural advantages, nothing else seems
to be legitimate.

So, I want to be very clear. I am all for the USDA and for our policy
being directed to the welfare of our farmers and our food system. I
mean, that may lead me in a different direction, but, it\'s just that
that\'s when, you know, I worry about the rhetoric of market failure. I
mean, of that being kind of where we \-- how we would kind of identify
what doesn\'t work.

I\'m much more comfortable saying this doesn\'t work for our wheat
farmers because our wheat farmers can\'t sell into the \-- you know \--
into an international marketplace. To me, that is \-- and that bothers
me, you know, because I care about our wheat farmers, not because I care
about a market failure.

MR. CORZINE: Okay. Good. Well, I\'m glad I asked the question. Wheat,
papaya a little bit.

MS. DILLEY: Jerry.

MR. SLOCUM: So, I mean, back to my point about barriers that threaten
coexistence versus barriers that threaten existence. I think No. 7, this
concept about preference, it\'s kept wheat from being introduced. It
keeps it from being able to exist. We do know if it coexists or not. It
doesn\'t exist. We think it can coexist because there\'s all sorts of
corn variety sources and all sort of bean and rice sources and the wheat
growers felt that they could grow and coexist with conventional wheat
but several European buyers, major importers of U.S. wheat said if you
do it we won\'t buy any U.S. wheat. We don\'t care, we just won\'t buy
any U.S. wheat.

So, if the grower that we can\'t jeopardize a billion bushels of wheat
exports from the U.S., 40 percent of the crop, so, it\'s a barrier to
existence more than it is a barrier to coexistence. And if we have to
couch those discussions in the same paper I think they\'re important to
separate them. Otherwise, you make it sound like nothing can coexist.
Personally, I think GE wheat can coexist if it were allowed to exist.
And I don\'t mean to disagree with Duane, but, I do think that we
confuse issues here.

The three year or more moratorium on soil in the organic business is not
a barrier to coexistence, it\'s a barrier to existence. So, let\'s
don\'t talk about it in the same vein as the threat of crop pollination
which, in fact, is not a barrier to existence or coexistence with
organic rice. Is that true? That\'s true because it\'s about a process.

So, we need to be careful of the way we phrase these things. Now, if
Mardi, if your point is organic doesn\'t have a chance to exist on the
scale it should because this competition is dollars, we\'re in a finite
budget, competition of dollars, a lack of appropriate information to the
appropriate people in the appropriate opportune spots, to me that\'s a
different issue. That\'s a different issue, okay, because that\'s a
competition for dollars to communicate a market opportunity, right.

And, so, with plenty of money that wouldn\'t be in my mind a coexistence
issue. That would just be an existence issue but since there\'s not
plenty of money, seems to be plenty of money in Washington, but, not
plenty of money to the folks in Washington.

DR. MELLON: Yeah, No, I know.

MR. SLOCUM: I think we have to be careful of the way we describe these
things. Otherwise we\'re going to make everything that follows something
else and we don\'t want it to be that way.

MS. DILLEY: Right.

MR. GRANT: A really short comment to that point, Abby. There are
tangible, technical barriers to existence and then there are market
barriers to existence or preference barriers and those are different. We
had a preference barrier in minor crops. We have a technical or monetary
and those are different. So, if we\'re going to group them at least I
think they\'re different.

MS. DILLEY: Carol and then Nick.

MS. TUCKER FOREMAN: Thank you for saying that, Duane. That really helped
me a lot because I was having a real problem dealing with wheat in this
context. Yesterday I started out by saying that I was troubled because
we didn\'t have a definition \-- a statement of what the Secretary had
asked and a definition of coexistence. Could we possibly have it not the
order that we have things now, but, it would help me if we had a list of
five problems we are trying to respond to. Why does the Secretary want
to know this? There must be a problem somewhere.

Could we please just have one through five or one through ten or one
through fifteen, whatever it is. What is the problem that we\'re trying
to address? It says, what issues. I still don\'t know what the issues
are. I\'ve got this thing about why we\'ve had coexistence in the U.S.
but I don\'t have a list of what it is that is obviously bothering a
bunch of people about the future and I\'m sure it\'s because we don\'t
do this every day. It sure would help me to have that list. And I think
people who read the report need it.

MS. DILLEY: I think what we\'re trying to do is do it by example but
maybe we need to pull it out in terms of saying this is what the issues
are with relative to coexistence.

MS. TUCKER FOREMAN: I\'m not getting it by example.

MS. DILLEY: Nick and then Randy.

MR. KALAITZANDONAKES: So, I\'m trying to think how I\'m going to word
this. Duane started by saying there\'s a technical set of factors that
prevent coexistence. Then there is a market set of concentrations that
can prevent existence and that\'s correct. In the case of wheat we have
one additional consideration, which is Adrian\'s original point, which
is that you have two very large marketing coops of wheat growers. Same
thing with Canada. And if you don\'t have that market structure where
two organizations can dictate the total outcome \-- in other words, if
you didn\'t have those marketing coops but you actually have small \-- a
large number of small farmer organizations then you might have had 12,
50, 100, 200 wheat growers that might have chosen to grow this and still
facilitate coexistence in the market in production but also in the
market.

So, the market structure is important here. So, it isn\'t just the
technical issue given just the market consideration. It\'s also that you
have a market structure which prevented existence.

MS. TUCKER FOREMAN: Is a trade association a market structure?

MR. KALAITZANDONAKES: Of course it is.

MS. TUCKER FOREMAN: So, it\'s nothing more than a preference.

MR. KALAITZANDONAKES: I don\'t know that Duane\'s organization would
feel that way. You know, the exercise of market power, they influence
market prices. In fact, they get higher prices for their growers. So,
this is definitely a market structure in my book.

MS. DILLEY: Randy and then Duane.

MR. GIROUX: I have the same question as Carol but I think I understand.
At least I can show you where I thought we were going and it wasn\'t to
identify the issues, but, the Secretary\'s charge is what issues are
there and my impression is that the eye of this discussion on
coexistence and another major trading bloc in the world spending
hundreds of millions of dollars and we are sectors of agriculture in the
United States saying coexistence can\'t work, doesn\'t work, and so my
impression was to look at it over a series of meetings to bring the
market and different sectors of the issue in, talk to them, get them to
share what their issues are with coexistence.

But, Carol, my take from all the people we had into the meeting there
weren\'t a lot of coexistence issues in the United States. Now, there
are some sectors that say there are coexistence issues the way I
perceive coexistence to be or it can exist the way I want coexistence to
exist and then it\'s up to the Secretary to decide whether or not
that\'s what they want to address that particular sector or but I think
when we look at \-- you know, I haven\'t heard a lot of coexistence
issues, but, I think what we have done with this document right here is
so these \-- you know \-- so why the huge dichotomy between all the
money we\'re spending in Europe and the fact that we\'re hearing
there\'s no coexistence issues in the United States.

Why is that? What\'s the fundamental difference between those two
trading blocs or those two countries or collection of countries? And
it\'s exactly what we\'ve identified here. These are the reasons why
coexistence tends to work more better in the United States than it does
in Europe and why the U.S. doesn\'t need to regulate coexistence the way
they have in Europe, but, it\'s not perfect and there are problems and
it still exists, you know, it\'s a journey, it\'s not an endpoint, and
we\'ve taken we\'re talking about being now, this is where we\'re not
quite there yet.

And, so, for me, that\'s important and valuable information for the
Secretary, right, that we don\'t \-- we may not \-- we don\'t have to
follow the European model of coexistence because we have things about
U.S. agriculture that enable us not to have to regulate it. And that\'s
why.

MS. TUCKER FOREMAN: And including the fact that we don\'t have labeling
and if you have labeling by regulation you buy into a whole set of
issues that we don\'t. That would help me a lot, but, we\'d have to go
back and kind of have an introductory paragraph that puts it in that
context, Randy, for me because there\'s nothing in this right now that I
think explicitly references differences between the EU and the U.S. We
keep walking around it.

So, if that\'s what the paper\'s going to be about I think we\'re going
to have to say that\'s what the paper\'s about.

MR. GIROUX: So that\'s what I\'m assuming is arrow bullet points to try
to pull that, but, it does make a specific comment about the EU and I
don\'t know whether that\'s the point. That\'s just my impression,
right. So, maybe, Michael, you can guide us. Maybe not.

MS. DILLEY: I think you\'re right in that what we talked about at our
meeting and what got on this track was it is a \-- they are coexisting
in the U.S. and why is that and then we started looking at other
countries around in comparison to what makes the U.S. Is it unique, is
it not unique and I think you description is perfect. Write it down and
we\'ll put it in our introductory paragraph.

Nancy and then Mardi.

MS. BRYSON: I think it\'s an elegant way of describing what we\'re doing
but I would not say having sat through the last committee meeting and
this one and they\'re the only two discussing that, that is the topic
we\'re discussing. I don\'t feel like we\'ve got a presentation as a
committee that lets us say here\'s the situation in Europe, here\'s the
situation in the United States, this is why something works here.

It seems to be more that the issue we\'re dancing around is a lot of the
problems that have been identified to this group just about everybody
who\'s presented relate to problems we\'re having in the export market.
They don\'t relate to what\'s happening here. So, you know, and that\'s
probably an over-statement because most things are over-statements. But,
if we\'re going to change the report to focus it that way perhaps the
committee does that based on its previous three reports and the kind of
collective institutional knowledge that you have because you have looked
at some of these things, for instance, traceability and labeling.

But, I don\'t feel like I would have the basis having heard what I heard
to take up any position about what the EU is doing versus what the U.S.
is doing.

MS. DILLEY: Well, I think that\'s right. I think where we have been
talking is it is not working perfectly either domestically or in the
domestic markets providing goods and interact in the global marketplace.
So, I think we are talking about those things. We\'re not saying it
works great and it doesn\'t work great as opposed to there, but, it\'s
kind of where is not working perfectly; is there \-- why is that or
where is it.

MS. BRYSON: So maybe in this place where it\'s not working well we talk
about why it\'s not working well with respect to the export market to
try to capture some of the comments that have been made by people who
presented about concern about unregulated events getting out there and
those sorts of things.

MS. DILLEY: Mardi, your card\'s doing push-ups.

DR. MELLON: I just wanted to be clear that we have not heard that there
are no problems with coexistence. We heard yesterday from the economist
from the ERS that coexistence is a big problem for organic folks. So, we
can \-- and I think we should try to describe that problem. Now, it may
not be such a big problem that it cannot be dealt with, but, I just
think we can\'t say that there is no problem and from a policy point of
view from the USDA\'s point of view it has to acknowledge that the folks
that are concerned about coexistence are \-- they think it enough of a
problem that they\'re doing quite a bit out there on the ground in the
state to try to minimize it for them.

I mean, they are suing, they are going to court, they\'re trying to make
the case in court which was successful but was, let\'s say, not
successful here. That, in fact, there are economic detriments that need
to be taken into account. So, I think we would do a lot if we just
described the situation and if we\'re very careful about describing what
the problems are with different interest groups but I just don\'t agree
that we\'ve heard that there are no problems.

MS. DILLEY: I don\'t think Randy said that. I think he said that
they\'re not working perfectly. Therefore, there are some clashes. We
just need to define those to your point, define those more clearly and
so I think it fits. I don\'t think they\'re in conflict. Randy and then
Michael.

MR. GIROUX: Just two comments. One, the charge is not for us to compare
Europe to the United States. That may be the motivation for the
question, but, Nancy, I agree, you\'re not going to compare and contrast
the U.S. I\'m not in for that exercise. But, I am in for looking at
coexistence in the United States, being able to state that there are may
coexistence systems and a lot of them seem to be functioning, some still
are not functioning, are growing and we\'re bearing growing pains and
there\'s barriers and we should clearly identify those and that\'s where
we had all the speakers, right, to tell us what their different sectors
thought about coexistence.

So, yeah, I\'m with you, EU is out and I\'m still focused if at the end
of the day we said there are things about coexistence in the United
States that parts of it are working, parts of it are not; there are some
mechanisms that allow it to work well. There\'s some things that aren\'t
working well for some sectors of the industry. That\'s a useful piece of
knowledge or advice to the Secretary.

MS. DILLEY: Michael?

DR. DYKES: Yeah, I appreciate the comment Randy is making, but, I\'m
with you. I don\'t think this is about comparing, contrasting U.S. with
the EU or anyone else. I think we all started off with all different
places about what is coexistence and what is the nature that we should
consider out there today. I think through the presentations we\'ve had
basically all the way through the chain we\'ve heard coexistence has
maybe a broader definition than we originally thought.

It\'s been going on for a long time and it\'s pretty well articulated on
the page and I think we\'re at the place now and we\'ve got some of them
laid out in the text what you need about the U.S. system to allow this
to happen, where are some of the issue points, where are some of the
problem areas versus things that need to be addressed that looking to
the future may facilitate it. I think this paper begins to lay out kind
of a summary of what are the various aspects.

MS. DILLEY: Okay. But, if we can, we\'ve got a little bit more time
before breaking for lunch. If we could just look at that section under B
and let\'s go. Are there any other comments on 1, for example, on
meeting the needs of individual farmers? Not so much to press what we
said. We know we need to capture some of the points that have been
brought up, but, is there anything else in terms of what\'s confusing in
here or needs to be elaborated on or clarified on in meeting the needs
of individual farmers or is there a particular point you want to talk
about in terms of where the growing pains are?

Carol?

MS. TUCKER FOREMAN: I\'m still back on the other one.

MS. DILLEY: Still?

MS. TUCKER FOREMAN: The issue I raised before. Don\'t we need a list?
That\'s the problem.

MS. DILLEY: Well, I think that\'s what we\'re trying to create here.

MS. TUCKER FOREMAN: What works. Okay.

MS. DILLEY: I mean, \--

MS. TUCKER FOREMAN: I\'ll come back to it.

MS. DILLEY: Okay. Leon?

MR. CORZINE: I don\'t know where you really start at. You start in that
opening paragraph. We had discussion before we had the comments. For
example, at the end, especially I think what we\'ve seen. I don\'t agree
with Margaret\'s statement that what we\'ve learned is that the existing
system is not working for major stakeholders. So, I would not agree to
that addition.

MS. DILLEY: Well, okay. I think this is where we\'re trying to decide
different points of view in terms of perception in terms of what you
need maybe on that is an example just like where it\'s working on that
farmer-to-farmer communication. Maybe here is again where we need some
examples of if it\'s not working for major stakeholders then what are
the examples.

MR. CORZINE: If you take a look, people read whatever our completed
document is. That statement is there is not accurate. So, I don\'t think
\-- I think someone reading this outside is not what we have really
heard and is not what I believe. I mean, we talk about some things that
are not working, but, just a statement that the existing system is not
working for major stockholders.

MS. DILLEY: Stakeholders.

MR. CORZINE: Stakeholders.

MS. DILLEY: Not stockholders. May not be for some stockholders.

MR. CORZINE: Well, if you want \--

DR. MELLON: Would you say that for many organic farmers it\'s not
working and some multi-billion dollar industries. I want a word that
says that, you know, for a multi-billion industry in the U.S. there are
problems and I mean, I\'m not sure why you\'re \--

MR. CORZINE: Well, because the presenters we had, I think, firms up what
I said. You know, actually some of the \-- in the niche market or the
market that\'s getting established and this is not against the organic
development, Lynn Clarkson said, you know, because of biotechnology this
helps me with my niche market. So, that is an example that really is
counter.

I mean, this existing system is happening and it\'s an economic issue
and a market issue, consumer issue, and, so, this \-- I don\'t know what
word you\'d change. The way I\'d change is I don\'t think we can include
that statement.

DR. MELLON: I mean, would you say the existing system is working for the
organic industry?

MR. CORZINE: Yes. Yeah.

DR. MELLON: Well, I mean, I think that for people who are not in the
industry to say that is \-- I mean, where do we think the ERS got the
information, the impression that it wasn\'t working?

MR. CORZINE: Well, they were collecting data, but, I don\'t think they
said that it\'s not working.

DR. MELLON: She said yesterday that was her coexistence is a big problem
for the organic folks. One of her impressions is that it is.

MR. CORZINE: I don\'t agree with that.

MS. TUCKER FOREMAN: She said there are reasons why people aren\'t going
to organic. Now, this isn\'t necessarily organic versus genetic and
biotech crop. It\'s not working. The farmers still have transition
costs. They feel in and out of step. They lack the support system that
conventional farmers have, the one that we just yesterday said earlier
oh, this is one of the things that helps coexistence, all this farmer to
farmer communication. These are all things that they listed data
available to them that is available to them that conventional farmers
have. You might even say it is a problem for them, but, those are all
things that she mentioned yesterday as problems they were having.

If we\'re only going to define coexistence as organic versus genetic
engineered crops.

MS. DILLEY: I think that\'s all we\'re trying not to do and I don\'t
know where we\'re leaping to, Leon, is if it\'s not working that one of
you have to go, you know, and I don\'t think that\'s what the
committee\'s trying to say. I think we\'re trying to say there are some
places where it\'s not working so well or it has some growing pains and
here\'s some examples of that and we can be doing better. We\'re making
a definitive call but it\'s not working for some groups and therefore we
can\'t accomplish it. To me, that\'s what you\'re reacting to, but, I
could be wrong because it may be by making that statement that if it\'s
not working for major stakeholders well then we\'ll just have to get rid
of somebody.

MR. CORZINE: The point is that we have not heard from anyone that the
existing system is not working for major stockholders.

MS. DILLEY: Stakeholders.

MR. CORZINE: Stakeholders.

MS. DILLEY: You\'ve been saying that what we need is particular examples
but I think some presenters have been saying it\'s not working as well,
at least from my perspective, and it could be working better.

MR. CORZINE: You can put in there \--

MS. TUCKER FOREMAN: You can have the point that one\'s working.

MR. CORZINE: But, you can put in that point that, okay, no matter where
the system is you can say that it\'s working better and I thought
that\'s kind of what we\'re getting to but none of them said that it\'s
not working.

MS. DILLEY: Well, you need different language I think is what we need
because I think both of your points are well advanced. There are places
where for some people it\'s not working as well as it should. It\'s not
working \--

MS. TUCKER FOREMAN: The complete needs of some stakeholders.

MS. DILLEY: Right. Right. So, I mean, there are some growing pains. I
think everybody agrees with that concept. We just haven\'t found the
right language yet. And if there was no problem we wouldn\'t be here.
So, Nancy and then Duane, Jerry, and then Nick. I don\'t know what order
your cards came up in.

MS. BRYSON: Well, I was just going to try to make a suggestion about the
language. This morning we got away from things that are working and
we\'re using this terms factors enabling coexistence and maybe part of
the discussion around things that are not working could be alleviated if
we found a parallel construction, maybe factors inhibiting coexistence
or something like that.

MS. DILLEY: Yeah, sometimes we need to say it five times. Duane and then
Jerry and then Nick.

MR. GRANT: So, I agree with Nancy. I think Mardi and looking at the
valid points I agree with Mardi to just reword it.

MS. DILLEY: Jerry?

MR. SLOCUM: Abby, my comment would be there are things in kind of real
practice lists that are coexistence that are failures because of
competing crops and then there are things that make life difficult for
organic folks simply because of the nature of the organic food and I
think part of it is to make sure we don\'t once again discuss all of
those things as the fault of something of alfalfa.

MR. KALAITZANDONAKES: And my comment is exactly the same thing. We can
make the same argument bullet by bullet or point by point that was made
yesterday or was made yesterday on organics for all value added crops.
You know, theme markets, theme information, not able to capitalize on
the same kind of tools that you have, you know, futures markets and so
on. I mean, for all the same reasons that you have difficulties getting
into value-added crops you have difficulties getting into organic
agriculture.

So, there is a separation between market forces and competitive forces
versus issues about coexistence.

MS. DILLEY: You\'re waving. Does that mean you want to make another
point?

MR. SLOCUM: I just want to add one thing to that and naturally that
means the guys who are already in the organic business, the Lynn
Clarksons of the world. They really are not for transparency. They like
it the way it is. Lynn doesn\'t want you to fix his problems. The
problems of the world created Lynn\'s business, okay. If you remember
back to his presentation he said, oh, no, no, no, I don\'t want you to
fix it, you know, because it\'s why I exist because I\'m finding market
solutions where Russ, because Russ represents a group of farmers that
want to participate in that industry, Russ wants more access to
information. He wants more transparency.

The Lynn Clarksons of the world want less transparency because they know
the system.

MS. DILLEY: So you\'re saying that the people who are there already want
-

MR. SLOCUM: It\'s working for Lynn, but, it\'s not working for Russ is
the point of it.

DR. MELLON: But, that is a very important point \--

MR. SLOCUM: It is.

DR. MELLON: \-- you do the organic thing differently just like the
conventional.

MS. DILLEY: Okay. Nancy.

MS. BRYSON: I was just going to say I think it would be useful in this
sector if we could figure out how to fit it into coexistence to identify
things to address to maximize the opportunity for U.S. farmers to
participate in growth in all of the markets that are important for
coexistence and try to sort of note those because that is what we\'re,
that is an incredibly important national goal. You can say it without
saying it in the way that it's market distorting or anything else. It\'s
enabling all farmers to capture the value added agricultural
opportunities.

MS. DILLEY: Adrian.

DR. POLANSKY: And I agree with that. And I have another thing to add
which is that to add to new value-added opportunity and so forth,
whether it\'s organic or other value-added or system changes that are
new all face very similar challenges. I went to no-till agriculture a
number of years ago and it wasn\'t the same kind of research and so
forth and guidance available to me in terms of how to make that system
work if I could protect soil from the rotor from the field and sediments
from filling the lakes and rivers and so forth. It\'s not that we
shouldn\'t work to improve and address those issues. But, it\'s not like
somebody picked organic or something else to somehow, you know, not
invest in it because I could have certainly used some additional
information and still could.

The extension in Kansas generally utilizes no-till systems in terms of
their yield analysis and cropping patterns and so forth. But, that issue
goes all the way around but I certainly agree with what Nancy said. I
think that\'s the key points.

MS. DILLEY: Russ.

MR. KREMER: I\'m looking at number 2. And I\'m talking about maybe an
issue of \-- it\'s probably more a solution. Nowhere can I find
addressing grower existence or co-districts and the reason why I\'d like
to maybe consider putting something like is because I think there are a
lack of grower districts in growing regions.

I\'m going to give an example of a problem, a domestic problem, a
domestic issue by the way that\'s similar to the wheat situation, the
situation we had with the pharmaceutical rice in Southeast Missouri, you
know, where if pharmaceutical rice would have been grown there, for
instance, nearly a hundred growers would have lost their marketing in
Anheuser Busch who threatened to pull out and blah, blah, blah.

I\'m saying a solution to possibly be to establish, you know, grower
districts that allows the sort of segregation that would put more of a
comfort level between consumers and that\'s why I feel that maybe this
would be an appropriate place to put, you know, this whole issue of
maybe lack of grower districts in certain cases.

MS. DILLEY: You\'d like to see the use of greater grower districts, is
that what you\'re saying.

MR. KREMER: Yes. I think it\'s about lunchtime, don\'t you? Take a
little break.

MR. CORZINE: That\'s kind of a farmer-to-farmer thing because what if
you have a grower region \-- this is done in Washington State and in
Oregon and in other places or some various identity preserved added
value products. But, if I\'m in a county or in a region, maybe half a
county, and you\'ve got six growers and you know I\'m already coexisting
and we\'re working everything out on what we\'re growing in our part of
the world with the organic community but if I get out-voted on that then
we\'re going to have grower rules that doesn\'t allow any be it GE or be
it a kumquat that I\'m not now going to be able to grow that?

You know, so I think there\'s another side to that coin that you\'ve got
to be really, really careful and you can\'t legislate that or put any
kind of regulation on that kind of thing. That has got to be \--
there\'s just \-- that can be a very slippery slope that heads you down.
Because what if you have the other way. You know, I mean, that can cut
both ways so there\'s a real serious problem with what you said,
Russell.

MS. DILLEY: Why don\'t we take until 1:15 and then we\'ll come back and
discuss some of those topics.

(Whereupon, a luncheon recess was taken at 11:52 p.m.)

[A F T E R N O O N S E S S I O N]{.underline}

MS. DILLEY: it sounds as though a few people or some people need to
leave by about 3:30 so we will organize our schedule over the next few
hours to adjourn around 3:30 so that we can meet everyone\'s schedules
and other needs for post the meeting.

What I would suggest perhaps is that we keep going through the paper
thinking about the pinch point section again, but, I don\'t like that
term, but, to me, that\'s a continuation of some of the things where
there are challenges to coexistence. Some of that looks a little bit
more future-oriented so maybe pulling it back to observations about
currently and looking a little bit at that.

Actually, just having the discussion and then I think one of the things
that at least I\'m challenged with in this discussion is kind of sorting
through the fine line between what are the rigors of being in the
marketplace and where it becomes more of a problem or issue, and it
depends on where you sit and what you\'re trying to do in the market and
also this fine line between what you\'ve created and also the fine line
between you\'ve created additional market opportunities by some
competitions among these different production streams and yet trying to
continue those also creates some competition.

So, we\'re talking about misinformation and how that\'s been used to
some advantage. I mean, it\'s just really kind of a mix of things and
maybe if can have the conversation then tease out the way we\'re picking
up from this conversation and how do we try and capture that in an
articulate way that hopefully someone has a conversation in trying to
describe what we see as what the issues are or are around coexistence.

It seems to me we\'ve got a little bit more clarity even though we\'ve
got a little muddled in terms of our conversation but then I think we
start extracting out some lessons learned from that conversation. So, if
we can kind of plod on through the document and have the conversation
and then take a step back and say, okay, so what are we learning from
this conversation I think that will hopefully give us a little bit more
clarity about how we want to shape the discussion and what we need to do
to get the paper to catch up with our conversation and what we\'re
observing in terms of pursuing this topic of coexistence and what does
it mean and how do we try and articulate what we\'re learning on paper.

Does that make sense to people? It\'s not highly structured but I think
it\'s just the nature of the topic and the challenge of trying to get
our arms around it. So, people did do some work so I think it\'s of
value to look at the work that\'s been done and have the conversation.

I don\'t know, is there anything else we\'ve left on the table or did
not discuss that somebody did want to raise in terms of what\'s in here?
It\'s not so much to the point of having statements in here that are
asking for clarification or just raising additional if you didn\'t
understand or see in here or something that\'s prompted another thought
that you wanted to at least put on the table and then if you don\'t have
anything else on the seven items that are listed as seven to the
challenges how did you frame it, challenging coexistence or inhibiting
coexistence.

Guy?

DR. CARDINEAU: I just have a question about number 2 and towards the end
of that there\'s a discussion about organic as opposed to genetically
engineered and GE-free and so forth and from my perspective there\'s
really not a competitive position between organic and genetically
engineered except that there really aren\'t any genetically engineered
crops that overlap with most of the organic crops. I mean there may be
some sweet corn, but, other than that I really don\'t think there is
anything for food.

Does that really refer to processed food? Mardi has some editing here
that says to the extent that organic food is found to contain GE
elements are you referring to processed food because I think of organic
I\'m really thinking mostly about fresh, you know, fruits and
vegetables. That\'s my concept.

MS. DILLEY: You\'re talking about visibly your question is a little bit
more elaboration on the point to whether the \--

DR. CARDINEAU: Yeah.

DR. MELLON: This is number 2?

DR. CARDINEAU: It\'s number 2 right at the end. You have a \-- the
colorful one.

DR. MELLON: All right. This is just to the extent. I mean, generally,
just a general point, there is organic processed foods and lots of it.

DR. CARDINEAU: But, can we put in the word processed to qualify that?

DR. MELLON: I think it is a \-- I agree with you that I think it is a
good idea to \-- you know \-- in our description of probably what\'s
working. I mean, we want to say right now that there are very, very few
organic biotech fruits and vegetables. And we can point out the three
there are maybe in the marketplace and I think that is one of the
reasons that probably is a factor in things working.

But, then we should \-- we can say processed food because there isn\'t
that much of it, although I think the general point is still \-- is one
that we need to keep in the debate and that is a lot of people, a lot of
the attractions of organic is that it is the only place that they can go
in the market that they think the other stuff\'s non-GE and the value of
that label as a *de facto* non-GE label is threatened by ongoing
adventitious presence and contamination of their product and that the
lack of that label or the devaluation of that label in that regard has
consequences both for the organic folks.

They are not able to quite settle on what they think their customers
might like, but, it also has consequences for the GE folks because I
think it increases the pressure for labeling in the marketplace if there
is no place that focus can go where they think they can avoid GE food.

MS. DILLEY: And that example to me kind of helps define why this is such
a tricky issue because the fact that GE \-- the fact that organic has
become *de facto* GE-free also makes it not a pinch point but a
challenge because if you can\'t detect the fact that it\'s GE-free then
you lose that market the way it\'s been created as a marketed advantage
or a niche market.

DR. CARDINEAU: I guess I don\'t see a lot of adventitious presence in
organic foods other than maybe processed foods because they\'re mostly
fruits and vegetables in the produce section and we don\'t know.

DR. MELLON: I agree. I think it\'s important.

DR. CARDINEAU: I understand your point.

DR. MELLON: It\'s a general point, but, I certainly agree that \-- you
know \-- it isn\'t a practical problem right now and we ought to make
that clear.

MS. DILLEY: Randy and then Carol.

MR. GIROUX: You intimated this as we talked about the definition of how
coexistence was more than just consumer products and the one thing that
I\'m missing here in terms of what\'s not working is commercialization
strategies without major market approvals and the disruption those can
have on stakeholders.

MS. DILLEY: So, commercial strategies.

MR. GIROUX: Commercialization strategies, right.

MS. DILLEY: Commercialization.

MR. GIROUX: Without major market approval.

MS. DILLEY: Okay.

MR. GIROUX: And because all stakeholders are members of the same supply
chain decisions by one sector can impact various sectors and so we\'ve
seen some disruptions in our export markets and that would be remiss as
an industry to not bring that forward.

MS. DILLEY: Okay. Carol?

MS. TUCKER FOREMAN: Yeah. I have some concerns about number 2 in two or
three categories. One is I object to inserting the word small in there.
I think Mardi\'s point, and I agree, you can\'t try to define the
difference between processed foods and agricultural commodities coming
out of the field and feed grain and produce so you can\'t do it in this
paragraph. It would have to appear somewhere before this. We have a
couple of paragraphs that talk about these are differences.

We\'re really not talking about adventitious presence here as much as
you\'re talking about somehow managing engineered products getting into
a processed food product and it\'s not a farming issue, but, it is a
food chain issue. But, I think we just have to have the new paragraph at
the beginning that lays out to people this is how we\'re using these
terms in this particular case.

And going back here right now, but, I actually thought Duane\'s point
about \-- I was trying to carry your sword for you \-- I would not \-- I
don\'t think that this should be limited to just global consumers but
this notion of \-- and I think Randy brought us to that point \-- the
notion that this is a bigger issue internationally even than it is in
the United States.

And then, finally, in this number 2 I think that it really does need to
be a little more teasing out of the role of genetically \-- of organic
as a surrogate for non-GE. It deserves an explanation so it gives more
than just the passing \-- I mean, Mardi was trying to do a place saver
here, but, that wasn\'t what organic was intended to do. It happens that
the two came down the track about the same time and it became a
surrogate and I think it probably has some coexistence verification and
completely apart from the value of organic foods and the value of
genetically engineered crops.

So, I\'d like us just to \-- we don\'t have to say nothing about this,
just tease it out a little further.

MS. DILLEY: Okay.

MS. TUCKER FOREMAN: Thank you.

MS. DILLEY: Alison, Duane, and then Nick.

DR. VAN EENENNAAM: Yes, I wonder looking at the desire to completely
avoid GE materials is, are we talking about zero tolerance here and is
that actually one of the issues of coexistence is there\'s a great
demand for zero tolerance. I mean, whoever else is in the marketplace is
doing their thing that is not physically possible. I don\'t know if we
should just more explicitly state that zero tolerance is a real problem
for coexistence.

MS. TUCKER FOREMAN: I\'m not sure it is in processed food.

DR. MELLON: And I\'m not sure it is if you are talking fruits and
vegetables. I\'m not sure that you can\'t achieve basically zero levels
of GE in fruit and vegetable kinds of crops. I just haven\'t delved into
it enough.

MS. TUCKER FOREMAN: Well, couldn\'t you \--

DR. MELLON: But, I do think that it is a really important point that for
some consumers the goal is no GE at all and that market, trying to serve
that market, that is a market that the organic folks would like to serve
and to the extent they can\'t it\'s a problem for them. It is the nature
of the problem is the physical impossibility that the high level of
difficulty of achieving that in any kind of a biological system and
pointing that out I think is something that we could do.

But, I guess I\'m resisting a little bit saying that it could never be
done.

MS. TUCKER FOREMAN: But, you never reached zero tolerance.

DR. MELLON: No, I don\'t, but, I do think that there are \-- if you talk
with people in the organic community that\'s the consumer that they see
out there whose needs they would like to meet and they believe that if
they can meet them they can continue to get a premium price. It\'s not a
huge set of consumers but it\'s a very real set of consumers and we, you
know, producers and consumers need in a lot of cases. And, in fact, that
is the nub of the cracker.

MS. DILLEY: Duane and then Nick.

MS. TUCKER FOREMAN: But, you might keep this from going off down a path.
I don\'t think we should ever use the phrase zero tolerance in this kind
of discussion because we don\'t have that now.

DR. VAN EENENNAAM: I guess to avoid completely GE materials to me is
zero tolerance.

MS. TUCKER FOREMAN: One thing at the consumer level GE-free, you know,
we\'ve been through this discussion once before about the number of rat
hairs you can have in the package of cereal. So, we can either have a
fight over zero tolerance or we can be a little more careful with our
language about people wanting to have \--

MS. DILLEY: To have terminology that works for everybody.

MS. TUCKER FOREMAN: Yeah.

MS. DILLEY: I mean, to me, I think deciding different facts on the same
issue in terms of \-- and it\'s been mentioned a couple of times that GE
has become \-- organic has become the surrogate for GE-free and that has
a positive and perpetually into the future it\'s also a potential pinch
point so there\'s lots of different elements to it and also the
expectation that things are GE-free and everything versus where it is
and where it isn\'t, whether it\'s fruits and vegetables or commodity
grain markets, those are different things that everybody\'s trying to
navigate around and depending upon what you\'re trying to do in that
marketplace is either a problem or it\'s your niche market.

So, there\'s different aspects of it. Duane and then Nick and then
Randy.

MR. GRANT: So, I think that pretty much captured that little comment off
to the side, but, I did struggle with this when I read it in its
non-edited format to believe that it was an accurate statement because
it just seemed like the language was pretty strong to me and I guess I
just kind of brought up a question of just overall if a lay person
reading this and hadn\'t been in the discussion would perceive that as
an accurate statement.

I do think that organic has, you know, I think that is accurate. It has
become the *de facto* non-GE brand within the U.S. For me, it would be
useful since many of our GE crops are placed in a niche marketplace this
whole discussion makes a lot more sense to me and tells me to put it in
context if we can bring international support in.

There is a non-GM, non-organic market in Europe. There\'s a non-GM,
non-organic market in Asia, both key customers of ours. The trade knows
about, farmers know about it, we have systems to accommodate it. It is a
coexistence issue and in that context this makes a lot of sense, so,
I\'d make a \--

MS. TUCKER FOREMAN: But, there\'s a domestic market.

MR. GRANT: There is a domestic, yes. There is a domestic market and I
think they can be molded together.

MS. DILLEY: Nick?

MR. KALAITZANDONAKES: So, a bit more on the conversation about the
organic label being a surrogate to GM-free which is we have plenty of
evidence to suggest that this has happened, quantitative evidence that
is, in the sense that many processed foods, both a GM-free and an
organic labels several years ago. Increasingly those have been taken
down to organic and more because of the overlap of the two segments in
the biotech reflective studies which suggest that that surrogate
relationship is in fact true.

We have very little research that indicates anything about consumer
preferences with respect to threshold. And, so, \--

MS. TUCKER FOREMAN: I didn\'t hear you.

MR. KALAITZANDONAKES: With respect to thresholds. In other words, what
consumers are willing to buy or not buy when you actually go from zero
to .1, to .2, to .3 and what the premium differences might be and so on.
In fact, there are only studies I know that have been published. I
don\'t know what happens inside food manufacturers doing research of
their own, but, there are only two published studies and both of them
indicate that consumers who buy organic can buy non-GM products are
perfectly happy to trade price for a higher threshold.

And, so, the issue of zero tolerance to Alison\'s point and how strongly
one makes those statements about zero tolerance or not go there might be
something that we should think about a bit more carefully because
there\'s not a lot of evidence out there or data that supports one
position or another.

MS. DILLEY: Randy.

MR. GIROUX: One comment, one clarification. So, I\'ll be very, very
pressed to not be able to use the term zero tolerance because I think in
the coexistence discussions clearly when events are not even approved in
a country\'s cultivation it\'s called zero and we\'re talking about
commercialization without meeting markets for those products are zero.

There\'s no threshold. So, we have to be able to use the term zero
tolerance. Now, as it applies to organic this is my question and my
clarification. So, when I buy organic I\'m assuming I\'m buying
pesticide-free, but, then I heard during conversations this week that,
in fact, there\'s a threshold of 5 percent for pesticides in organic.

So, when we talk about GM-free and organic are we talking about zero or
are we talking about some threshold and I don\'t know what the answer to
that is.

MS. GEISERT: I\'ll answer it and I\'m also going to talk about Nick\'s.
I think when you talk about consumer research, I think it\'s very
difficult from the proposition of biotech or pesticide or additives, how
much mercury you can add to it, and is 30 parts per billion acceptable
that costs you \$1.29 a can or is 55 acceptable and it costs you because
you feel it\'s safe.

So, I think how you term that, let\'s get real, you can\'t. They don\'t
want it. They don\'t want, you know, hairs and other things and I think
we have learned, you know, to set what we believe are safety standards
and acceptable standards and, so, I guess that research on allergens,
very difficult sources on allergens, and you would say, well, we know
the thresholds, we know you can\'t get to zero, you know, what\'s the
threshold. You can do the science but if you ask those consumers with
kids and it\'s life threatening any number above zero doesn\'t feel
right and they can\'t differentiate a part per billion from a part per
trillion like you can.

And, so, I think to get consumer research on that is not realistic. I
think when you say standards, you know, pesticide standards have been
there for a long time and I think, you know, so you say, we\'ll use 100
for example, so, you have 100 that\'s allowed, organic less five, okay,
so, that doesn\'t mean there\'s a hundred out there today. You know,
there\'s a tolerance that\'s in there. Where it really comes really
depends on the level of contamination in the fields. I mean, you know,
there\'s a lot of things that contribute to what\'s going on in the
market and so we have an obligation to be in compliance with the organic
regulations and so if it was 100 before we now have a new hurdle, it\'s
5, and we need to test accordingly. Why? Because other people can test
theirs and we didn\'t get that number.

So, when you say for organic, organic is again process-derived, right.
You are not using biotechnology as a tool in the repertoire for organic.
It doesn\'t say it does not contain, but, in reality companies vary. The
early statements of why we don\'t regulate it and the new learning curve
over time is what standards we may set and what we can control too may
be different than what, you know, a General Mills can do might be
different than a Sarah Geisert, Inc. can do.

And, frankly, we have more potentially to lose with our brand and, so,
therefore, the control process that we put in place may, I could argue
could be or may not be more restrictive because we have a bigger brand.
I mean, it\'s risk-benefit. And, so, I think when you say you have these
*de facto* standards there is discussions that occur on processed foods
that would say that as we are sourcing materials and we are looking at
our data are we comfortable with if it has trace amounts the trace
amounts that we are finding because it can be found by others and, so,
again, the market, Lynn Clarkson\'s point, has allowed what we say is
this is what we expect for you. Others may expect something different
that allows the market to operate efficiently but there are \-- if you
ask companies quietly around the room, do we have different standards,
and they\'re not necessarily fixed because it\'s depending on what\'s in
the market that day or that year or that trend that\'s coming.

But, there are standards just like on pesticides. It\'s high, but, it
may not be high for us. We may want to see 1 because, you know, levels
of detection. You know, we have a hard time defending when people don\'t
even know what\'s in there defending any number by someone you ask do
they want 20 parts per billion of mercury or 30, they don\'t want any.
So, I think that\'s much different, but, there are indirect standards
that you set.

DR. DYKES: Do you have an indirect standard on biotech in organic?

MS. GEISERT: Absolutely.

DR. DYKES: And what is that? Take corn for example.

MS. DILLEY: Stephanie.

DR. WHALEN: Maybe I missed earlier an example of coexistence that works
in a specialty crop and I go back to papaya again. Japan is the most
valuable market for Hawaii papaya growers. It is zero tolerance. They
check on the other side every batch that goes over there. And the papaya
growers have met that, can meet that in the mix of lots more GMO
planting over there because you don\'t have it, nobody has a crop.

So, it is zero and they are meeting that market because there\'s a value
in it and they figured out how to do it. This whole system, just the
question, if the market is valuable enough for the growers they\'ll
figure out a way to meet that demand, whatever the consumer wants.

MS. DILLEY: Sarah?

MS. GEISERT: You know, I think when you talk zero and we think chasing
zeroes away from some public dollars in some cases and so I think
chasing zero is really about the level of detection and I think we
missed that point and so today if we were to go back, we were a part per
thousand, a toxicologist would tell me, and then it became a part per
million and parts per billion and, you know, analytical chemists did a
fabulous job, you know, getting us lower and lower. Zero changes and so,
you know, there have been times when we thought we knew what zero was
and a market change has nothing to do with biotech. It had nothing to do
with the health hazard that they changed the level and we capped the
level because that\'s how the regulations were set to say you can\'t
have it there.

And we have an obligation to comply with the law and so when you find it
we take action because it\'s not supposed to be there but it\'s based on
the level of detection and so when the level moved and so today when you
said you meet it you might be surprised at what you don\'t meet and I
think you can building things from atom to atom versus the other way
around, that level of detection becomes even more significant for what
are we talking about.

And I think, therefore, where do you set as a society with benefits? How
do you get to a theoretical zero is what I see the market yearn for but
they\'re all \-- we\'re all going to set them differently and it has to
do with \-- so zero changes. That\'s what our experience has been.

DR. WHALEN: I mean I truly agree with you. That\'s the residue chemicals
and I know we chase the lower levels, but, you\'re talking about
different technologies too and how if you know something has crossed or
not crossed. I mean, you can return on that and so, yeah, if you just
have a whole bunch of seed and one of them that\'s not what the testing.
The testing is the food itself and so if the food is transgenic enough
you know that.

I mean, it\'s a big fruit and they test the trees before they allow this
to go so there can be some disease in some crops that you can determine
this on and that\'s what agriculture is all about. It is about different
crops. Every crop is different. Some you can do it and every product is
different and what you can say about that product or not.

But, I\'m totally in agreement that with chemistry, you know, chase
zero, and we\'ve had nothing but those problems with pesticides and
stuff, but, I\'m just saying you really need to know that the specific
system you\'re working on what you can say about it.

DR. SCHECHTMAN: I\'d like to comment on that. I mean, this zero thing, I
mean, it seems to me that there is no way to know that anything is in
fact zero unless you test every grain or every papaya. You can tell that
a tree started to be non-transgenic. You can certainly do that. Whether
you can tell that the tree didn\'t get any pollen from a transgenic
papaya I think you have to do that by testing every fruit which
obviously is not a commercially viable thing to do.

I think all of these matters are \-- I think the discussion I think was
really pretty illuminating between the idea of what consumers want and
the reality of delivering or trying to deliver what consumers want
within the bounds of what you can do.

MS. DILLEY: Duane.

MR. GRANT: A real short comment. I think that the original thought here
is the intent of the consumer and the intent of the provider to meet the
consumers\' need and actually getting to the zero set point doesn\'t
really matter and are you satisfying the consumer that you\'re meeting
their intent. I hope that\'s helpful or not. I also don\'t think that. I
mean, I don\'t know this for a fact but I\'ve seen a few GE and non-GE
labels and I have yet to see, you know, free genetically modified.

MR. KALAITZANDONAKES: Yes, but, there\'s plenty of labels like this.

DR. MELLON: Not in the U.S., not without a context statement.

MS. DILLEY: Okay. I think it would be helpful to go through some of
these pinch points because what we talked about yesterday about setting
parameters around the paper in terms of looking into the future there
are some of not only describing what is but also observing where there
may be some additional issues in the interest of trying to highlight
where maybe we can try to enhance coexistence.

And, so, there was a fair amount of work that was done from the last
meeting to talk about different, what we had termed at that point, pinch
points, which you could say are also potential barriers to or inhibiting
coexistence and maybe perhaps trying to key out what the main points of
each of these are with that in mind and getting some discussion around
those.

Obviously, I think people who had not been at this last meeting are why
are we talking so much about ethanol and I think that was because that
really was part of the presentation and the discussions on the
infrastructure and anticipating or having a conversation about where
that placed pressure and why. We talked about the transportation system
generally as where you end up having a greater competition potentially
among different production systems and trying to source things and keep
them separate, etc., more opportunity for those to interact with one
another. That seemed to be some issue as well as just the basic
infrastructure being maxed out potentially and having some greater
stresses on it.

But, additional thoughts or reactions to infrastructure and market
structure and some other pieces that folks have done a fair amount of
work on? So, let\'s look at that infrastructure pinch point. Any
additional comments or thoughts? Duane?

MR. GRANT: I think the kind of the opening of the pinch point section
just put incredible amounts of weight on the growth in biofuels, bio
energy, that entire sector. I actually like Michael\'s comment that
coexistence versus it always has kinds of wraps up my reaction, I guess,
to this section.

I\'m not sure that biofuels will be near the driver on coexistence
specifically as this kind of sets up. Maybe significant issues,
definitely, but, actual hard drivers of coexistence issues, you know,
\--

MS. DILLEY: But, the big issue that, is the coexistence big issue of it?

MR. GRANT: In my mind I can\'t really see it.

MS. DILLEY: Nick.

MR. KALAITZANDONAKES: Yeah, I agree with that.

MS. DILLEY: Anybody have a different opinion? Okay.

MR. CORZINE: I would just add that I kind of struggled with that a
little bit on that. It\'s a fact today that we\'re adjusting. The system
is adjusting at will and it does \-- there are some infrastructure
issues but I think the focus is maybe too much on biofuels and
questioning whether in the interest of saving paper whether how much of
that is even needed. You know, we can save quite a bit there as we put
this together.

MS. DILLEY: Okay. For processors.

MR. CORZINE: To me it\'s a little bit more of economics of determining
these things, okay.

MS. DILLEY: Yeah.

MR. CORZINE: And that\'s part of what\'s working and in some eyes maybe
they wish there was more economic advantage so the coexistence would be
even stronger but maybe the pinch point is the economics.

MS. DILLEY: So I don\'t hear any disagreement with the fact that it\'s
an issue but maybe it\'s an economic issue but it\'s not a coexistence,
so much a player in the coexistence, in the realm of coexistence.
Michael?

DR. SCHECHTMAN: Can I just kind of ease back out for a minute a bit. I
just want to see if there are parts that are specifically infrastructure
issues. The issue of the fact that the system is maxed out and that an
increased number of products potentially requires more \-- specialty
products potentially requires more infrastructure to be able to manage
them separately. That was something that was talked about before and
while that\'s not \-- that\'s probably the reverse of saying the
commodities are going to swamp out everything else but if the future is
a situation where there\'s going to be a lot more \-- there\'s going to
be a lot of de-commoditized products at least I recall that before there
was some discussion about that being an infrastructure pinch point.

So I\'m just trying to see if we\'ve taken it all away or if that\'s a
piece that remains.

MS. DILLEY: Adrian and then Mardi.

DR. POLANSKY: I don\'t think ethanol or whatever the niche markets
we\'re talking about really matters a whole lot because the niche
markets require a different set of storage and transportation and so
forth and so I think it relates to more of whatever the size of the
organic market is that the other areas that aren\'t commodity is what,
at least in my view, what drives that.

From at least my operation standpoint if I\'m going to participate in
those other markets at whatever level I\'ve got to have the storage and
infrastructure to deal with that so then the commodity side isn\'t \--
the ethanol side is not directly related in my opinion so you\'re not
going to go through, for the most part, and so forth in the traditional
sense. It\'s a different marketing stream.

MS. DILLEY: Okay. Mardi and then Randy.

DR. MELLON: I actually remember the discussion and I think it is an
important point to make that specialty products, just what Michael says.
I think that that is something that could influence the ability of, you
know, folks to meet, you know, meet the very needs of consumers and just
noting that is \-- I mean, I found it interesting.

I think the additional point that the same infrastructure is going to be
burdened or affected by this, you know, sudden spike in demand for
energy costs, I mean, is something that is a little bit too far, but, I
thought the point was an interesting one although, you know, if it
really isn\'t the way farmers make decisions then I would certainly boot
it out. But, it seems important to me that if you\'re going to try to
move segregated product through a busy infrastructure that something
about that infrastructure\'s going to have to change out to accommodate
those desires for a segregated product.

MS. DILLEY: Nick, then, Jerry, then Randy.

MR. KALAITZANDONAKES: So, biofuels have changed the need for
infrastructure but probably localized it more than anything else. You
don\'t move oil away from the pressure plant. You don\'t move corn to
places far away anymore. You\'re delivering it to more of a localized
area.

So, if anything you are using less, not more of the infrastructure
unless you have any more acreages. So, the question is whether we are
bringing a lot more acres. We have had a lot more on-farm storage being
built in the last few years, but, somebody who can tell us a lot about
transport capacity utilization and storage is Randy so, yes, he\'s great
here.

So, I don\'t see any reason why the biofuels discussion is part of the
coexistence problem.

MS. DILLEY: Jerry and then Randy.

MR. SLOCUM: The biofuel discussion was meant to highlight the fact that
commodity crops are all of a sudden back in vogue. They are the thing
that producers want to grow because the concept of the producer to
understand it\'s the most effective thing he can do on his property
basically and all of a sudden corn is not \$2.75 in Chicago anymore,
guys, it\'s four bucks.

Lynn Clarkson said what that\'s going to mean for his business it\'s
going to be harder for him to convince his customer to grow these
specialty grain crops. It\'s going to be easier for him to go to
Argentina, a place he mentioned, the source of those crops. Caren Wilcox
referenced in her day yesterday we\'ve seen fewer and fewer corn acres
grown organically and we\'ve seen fewer and fewer soybean acres grown
organically.

This system on infrastructure is mainly aimed at those two grain crops,
if you would. And the comments come largely from Clarkson and the grower
that was here that was here when Clarkson was here, that guy, so, there
was another, there was one of your neighbors, Leon, a soybean grower,
farm grower.

The point being is that the new demand for commodity crop because of
biofuel it\'s a spike that\'s going to start a new plateau. Yeah, I
mean, it\'s going to create tremendous infrastructure partly, with Nick,
because the grain flow is not in the direction it\'s been going for the
last hundred years. It\'s not going south, it\'s going east and west and
we\'re not set up to transport it east and west. Cargill\'s got to go to
three ethanol plants in California and you don\'t grow enough corn to
make corn flakes from, let alone feed ethanol plants.

It\'s going to create a tremendous infrastructure issue and what that
means to the grower is he\'s going to invest his money raising commodity
crops rather than these other things because, like I said, he\'s got so
much more value in his commodity crops than any other thing so if you
want, you know, organic oats you\'re going to pay more for them. That\'s
so. Because that guy can raise other stuff and make more money than he
was making yesterday and I\'m not an economist, you understand, I\'m
just a farmer so I don\'t have on hand except the money in my pocket.

MS. DILLEY: Randy.

MR. GIROUX: You spoke very eloquently at the last meeting about this
conflict. But, the key is that the rail system today which will probably
be the system of choice is currently maxed out so we\'re talking about
this new plateau, you know, and the demand for commodity crops and I
don\'t think it has to say ethanol or biofuels. It\'s just that we\'re
going to see a spike in commodity crop.

It is going to have added price effects, finding effects, storage
effects on the coexistence of other crops and so I think it\'s an
important enough point to capture. I don\'t think it needs to be focused
on biofuels as the driver. There\'s some sensitivity to that, but, \--

MS. DILLEY: So, it\'s fluctuation in commodity versus specialty as
opposed to biofuel as a particular thing and that\'s just an example of
the most recent example.

MR. GIROUX: Right. So you can think of the future as all three take an
equal chunk of the market and there\'s the whole and then, you know,
what does that future look like, right. And the future of all seed
growers equally in a third of the space is what this infrastructure says
is that\'s not the way the market\'s going to drive based on the current
price signals. It\'s going to be a big chunk here for specific
applications and those will likely be commodity crop and it will
challenge infrastructure, storage, ability to shift, timing, pricing,
access to rail, all of those things are going to make it even more
expensive to do niche products than before.

MS. DILLEY: So does that make the conventional grower happy?

MR. SLOCUM: It makes all growers happy, sure.

MR. GIROUX: Sure, it makes all growers happy because it\'s good
economics, right?

MS. DILLEY: Right.

MR. GIROUX: I think to the point is that it doesn\'t even without
mentioning biofuels if you look at it\'s an infrastructure issue and you
could also move it up to the point about challenges for coexistence. Our
infrastructure hasn\'t kept up with what we\'re doing in production and
it doesn\'t matter what you\'re producing; that it\'s not keeping up.
You know, we are living with our waterway system. You can go to the rail
system, you can go to the highway system.

I don\'t think the highway system\'s pretty new but we\'ve got the 50th
anniversary of the interstate highway system so I think maybe it would
be more appropriate that\'s maybe one of the points under challenges of
the infrastructure to deliver what the consumer wants at the end of the
day and it\'s as simple as that really.

MS. DILLEY: Nick, then Adrian, then Mardi.

MR. KALAITZANDONAKES: I had a question for Randy. Randy, when commodity
prices go up how does that affect your specialty crop business?

MR. GIROUX: Lots of different pricing mechanisms around specialty crops,
but, correct me, Leon, but, for us to be able to get a grower to grow a
specialty crop he has got to make the same, if not more dollars per
acre, so, if the base price of corn goes up then there\'s a premium
attached to the base price and so then generally the whole price of
specialty goes up.

MR. KALAITZANDONAKES: Right. But, my question is are you still going to
pay because you have a manufacturer of beer in Japan sitting there and
wanting non-GMO corn for their starch production and to them is two
percent difference so therefore they will pay in which case you still
are going to have the same acreage or are you not?

MR. GIROUX: Well, that\'s a hard question for me to answer but as my
company we are a customer-focused company and if we have customers
demanding something we will try to do everything we can to meet that
demand as long as it\'s practical and there\'s a price attached.

MR. KALAITZANDONAKES: Again, do you think that the demand for specialty
crops in the U.S. is going to diminish because we now have higher
commodity prices or is it going to be the same proportion of acres it
has been the last five years? It doesn\'t change very much, right?

MR. GIROUX: It\'s a good question and I\'m not trying to be evasive but,
really, you know, as prices go up then customers reflect on the choices
they make and some, you know, believe and some make different decisions
and some will want to stay, hold fast, some may not. I don\'t know.

Some may use this as a reason to differentiate even more.

MR. KALAITZANDONAKES: I guess what I\'m asking is prices of commodities
have gone up and down in the last ten years. That acreage of specialty
crops has stayed all the same proportion. It\'s not price sensitive and
so the premiums might have to go up and the price for, you know, high
starch corn will be different but I\'m not really sure that the acreage
is going to change. Anyway, I think we\'ve covered this discussion.

MR. GIROUX: So the only issue is the substitutability issue. I know
where we get into prices where the prices go so high then you can
substitute it for something that we used to do.

MS. DILLEY: Let\'s take Adrian, then Mardi, and then we\'ll move into
the market structure and access.

DR. POLANSKY: I think we have to be careful and, again, part of what I
was going to say as I sat here because I think we have to be careful not
to think we fully understand the dynamics of what\'s going on here.

MS. DILLEY: No fear of that.

DR. POLANSKY: I\'m not so sure it\'s totally simple because it\'s not as
simple as we may think and this leads to, this leads to this because as
was mentioned a little earlier whether ethanol would be produced and how
and where the quantities that need to be transported, whether it\'s more
localized and so forth, doesn\'t necessarily impact the whole
transportation system in a way that we might think that we could predict
and I\'m not sure.

I mean, in my little business I know some people are in and out and so
on and I have \-- what we do as a certain amount to our commodity prices
in terms of what we do, we\'re not going to quit doing what we\'ve done
for the last five, ten, fifteen years. Now, it may have some impact on
new entrants into the field, but, I would suggest that Leon may continue
to grow blue corn and so forth. He\'s set up to do it. He\'s, I think,
going to be inclined to do that.

And those factors in terms of transportation are more important than in
terms of what\'s happening with ethanol. Just what\'s happened to the
railroad and the infrastructure in terms of shipping coming in from the
Asia and Pacific Rim and have that change at least for the railroads and
which direction and pricing and all that sort of thing and it\'ll take a
lot more than what we\'ve just addressed here that\'s going to have a
lot bigger impact on the infrastructure than ethanol I guess would be my
point.

MS. DILLEY: Yeah, you\'re absolute right and I think we ought to
recognize that to step into the future with confidence is much less
conclusive. I\'m sure it\'s an interesting conversation. There\'s kind
of a difference between having a conversation and trying to capture with
any certainty in the document.

MR. GIROUX: I think the point is, and Leon put it succinctly, is that
the infrastructure word doesn\'t mean anything because whether it\'s
shipping or what.

MS. DILLEY: Because that\'s already happening, right?

MR. GIROUX: Right. And that will change the landscape and make it even
more difficult on coexistence.

MS. DILLEY: Mardi?

DR. MELLON: I agree. I agree you can\'t predict. I don\'t think \-- I
mean, I want to put in another word for the American consumer. Once the
American consumer figures out the impact of ethanol on meat prices, on
other prices in the marketplace I think their willingness to continue to
subsidize ethanol is also going to be challenged.

So, whether this is \-- you know \-- whether this is a spike or plateau,
even that I think is still up for grabs.

MR. GIROUX: You\'re on the edge. We\'ll have to have another discussion
here.

DR. POLANSKY: I\'d just like to add one more thought and in terms of the
containerized shipping and all the products that are coming in here, the
challenge \-- I mean that has a lot of opportunities for niche marketing
in a way to move products that we haven\'t had an opportunity to move or
access to move for a long time.

The issue is getting the railroads to set off those containers so that
we can sell them and do it in an efficient manner but there is an
opportunity that we haven\'t had ever before that would actually enhance
that opportunity for identity to preserve a niche market. So, I mean, it
can cut both ways, but, it\'s not just centered in one direction
necessarily.

MS. DILLEY: The next topic that we have under here is market structure
and access pinch points and I notice we\'ve got an access to credit,
diverse agriculture impact, and a note about coexistence versus growth
and I guess this gets back to is this a coexistence issue or general
issue so on this particular piece this is trying to capture market
structuring access as potentially inhibiting coexistence. That\'s the
question, existence or coexistence.

MR. GIROUX: Abby, I\'m sorry, we were sort of sitting here dissing the
railroads. Where are you at? We were discussing recommendations of this
committee about what we ought to do about the railroads.

(Discussion off the record)

MS. DILLEY: So where we are is we\'re past infrastructure and go to
market access \-- market structure and access. The title is one page and
the one sentence talks about it on the next. So, the question was, is
this an existence or coexistence? Is this particularly unique to
coexistence or how does it play itself out in coexistence and does it?

DR. SCHECHTMAN: Are some of these pieces existence and some of these
pieces coexistence?

DR. DYKES: I guess I have a comment on it. Greg Jaffe and I are on the
same page. I don\'t see this as coexistence issues. These are issues,
access to credit is an issue of agriculture, not necessarily existence,
coexistence. I don\'t see there\'s anything we need about access to
credit as an issue. It\'s a problem and as agriculture becomes more
capital intensive it becomes a bigger problem.

MS. DILLEY: Russ.

MR. KREMER: For every grower, I guess I wrote this. I testified I think
three times before the Farm Credit Administration on this issue and what
I meant by this is as it applies to coexistence and I think the word
equitable probably is a big word and important word in this statement
that there are barriers to this whole idea about diversified agriculture
because agriculture credit, I mean, people acknowledge that there are
barriers in getting over this conventional mindset.

I mean, for instance on the magnitude of a different type of
agricultural systems, a lot in developing cooperatives versus the Bank
of Co-Operatives Co-Bank and so if you\'re familiar with that they
basically won\'t look at too much unless you have a five million dollar
project. That\'s from experience. And that in my experience when you
talk about more niche-type cooperatives or business activities related
to the organic or niche or specialty crop you\'re talking about a lot
smaller type. This is one example.

I do think it affects the balance of a diversified agricultural system
because of the denial and barriers to access and credit for different
types.

MS. DILLEY: It almost sounds like a different dimension of the concept
of dominant preference. Isn\'t that the term you used, Duane, where
it\'s kind of the risk diverse versus diversified agriculture kind of
collides and this is one other dimension of it in terms to credit or
access to research dollars or new products that we were talking about
and it seems like once you have a product out there that kind of breaks
through then other stuff will follow. Credit and lots of other things,
research interests. That there\'s that shift so there\'s almost a risk
averse versus diversified. I don\'t know. That\'s what struck me.

DR. DYKES: I don\'t deny what you\'re saying that coops can be
difficult, but, on the other hand it seems to me you don\'t see the
support system issue. But, if you look at the ethanol coops, what\'s
been the issue with those? You can\'t get in quick enough because of
funding because they get all the money they need before everybody gets a
chance to contribute.

So, it comes back to me to be more of a market-driven type of thing that
if people see opportunities for their cash they rush to put it in there.
If they don\'t it\'s difficult to attract cash for even venture capital
businesses. You\'ve got the same problem. The investors, before you\'ve
filled up the mic (sic), that\'s what is going to be the next
blockbuster but you can\'t get a venture capital fund to put any money
into it and other things, they spend their money on other things.

So, there\'s winners and losers. So, it sounds to me like it\'s an issue
of a multitude of different buyers and placing economic value, not a
coexistence issue.

MS. DILLEY: So, Russ, then Nick. I saw you nodding your head and I would
love to hear your economic stand on that and the kind of spin on that
sort of thing.

MR. KALAITZANDONAKES: I generally agree with Michael. Even in general, I
think, you know, we are actually are on the subcommittee that brought
this together but as to the aspects of this, you know, they\'re not \--
I mean we can generalize exactly. I agree with your original statement
that they derive certain factors that may be in starting niche markets,
specialty markets a bit more difficult and that is a fact.

Now, the question is, is that the coexistence issue or market reality
and I think it goes to the second category so the question is \--

DR. SCHECHTMAN: I think it begs the question of how we\'re going to talk
about the existence issues as, again, is this something that goes into
context-setting before we talk about the actual coexistence issues
that\'s something like, you know, there are barriers for all different
kinds of agriculture. They play out in different ways for some markets
where there\'s no expectation of getting a lot of money if most of the
sources of money only ship out in big chunks because they\'re expecting
bigger chunks back than those niche markets can produce. It creates a
certain kind of barrier for the smallest players.

You know, that\'s part of the scene \-- is that part of the scene
setting around us; is that something you want in the document as opposed
to a barrier to coexistence, something in an introduction? That\'s the
question.

MS. DILLEY: Russ, and then Mardi, and then Carol.

MR. KREMER: Yeah, I don\'t disagree with that point of view. I think it
is an issue. I will say that. Whether it\'s a coexistence or an
existence issue and getting back to Michael, I guess when I address
these issues with access to credit and business structure, you know,
this is probably one of the smaller moderate size farmers that I deal
with. There are greater issues and that is the power in this marketplace
and the leverage in this marketplace. That seems to be a barrier with
credit, you know, going up against, you know, the more powerful horses
to beat and, to me, it is hard. We\'re talking about the scenario where,
you know, where everyone has the ability to coexist, you know, among the
little guys, among the giants, but, access to credit is certainly an
issue and barrier.

MS. DILLEY: Mardi, then Carol, and then Stephanie.

DR. MELLON: Well, I mean, I look on this as part of an opportunity for
this committee to kind of frame this issue in a much more positive way
and a very different way than it\'s framed in the working context. And,
you know, by which I mean rather than having just kind of some gain, you
win, you lose, that we could frame this issue in a way that really tries
to help all of the sectors of agriculture, particularly the ones that
we\'re kind of embroiled in some of the issues with the biotech
coexistence issues.

But, I mean, I think this report comes out as one that \-- you know \--
that reinforces USDA\'s commitment to making kind of organic agriculture
as one of the kind of agriculture that the small and medium farmer could
benefit from, something that worked better by trying to mediate some of
these concerns rather than taking sides of the biotech industry versus
the organic industry.

That\'s a very good place for us to be. And we all bring \-- we all know
we bring different kind of broader agendas to this, but, it seems to me
that having some of that focus really does a lot to, you know, put a
positive spin or turn this into kind of a \-- we can make this into a
positive report.

As I said, one of the things that contributes to it not being positive
is this feeling that basically the USDA has put zillions of dollars into
making the biotech industry work in America solving all the problems
it\'s got all over the world and giving very little to anyone else.

That impression, however, true it is, makes people very unreceptive to
the notion that we ought to do something to help biotech fruits and
vegetables. It\'s like, what else do you want? But, some sense of \--
you know \-- some sense of appreciating that there are other approaches
to agriculture that they too deserve to be supported; that the U.S. has
a lot of tools to support them; and that we could do that and that
support is what we could do to make possible coexistence in the U.S. is
a framing that I think would be a beneficial one.

MS. DILLEY: Stephanie, Michael, and then Nick.

DR. WHALEN: I disagree with this position of coexistence and basically
in Hawaii where we\'re all small specialty crops access to finances is
just a problem for us to avoid. It has nothing to do with coexistence.
It\'s just \-- you know, to get in existence.

So, in addressing what Mardi\'s saying and I think that under this
title, the fifth concept and in this statement trying to give a
definition is what it is, but, as the next issue that we deal with in
terms of what is it to get these other niche areas better able to get
into the marketplace and find their niches and be able to develop and be
successful. And that to me is an existence thing, the struggling to get
there. You can\'t get there because of these other barriers. It\'s not
just financial barriers. There\'s lots of barriers and so I agree with
the group that this is not a coexistence issue, it\'s a bigger issue and
we should really as a committee maybe try to address that issue in a
different context but not in this one.

MS. DILLEY: Michael, Nick, and then Guy. Then we\'ll take a break.

DR. DYKES: I agree that access to credit is an issue in agriculture is a
problem and it\'s become a bigger issue in agriculture over the years.
If you want to start farming today, whatever you want to farm, you start
with nothing, you have major obstacles to get credit to farm. I don\'t
think there\'s anyone in this room who disagrees with that.

So, I\'m probably putting that into some kind of context around an
attribute or characteristics of I\'d say agriculture globally but,
especially agriculture in the U.S. Demand for capital access, capital,
is an issue. I still just don\'t see it as a coexistence issue. I see it
as an attribute of American agriculture and we have to compete with all
the other returns on capital in other sectors, not just agriculture.

MS. DILLEY: Nick and then Guy.

MR. KALAITZANDONAKES: So, I think I would agree with Mardi that putting
some positive framing to this would be very useful and certainly we have
had in our discussion about existence versus coexistence that we
probably have accumulated enough material to justify a proportional
piece on existence that can be a good home for all of these points.

And, so, to put something, whether it\'s in the front or in the
introduction, or, something that says we would like to find ways to
support more conventionality in the \-- there\'s that word, I\'m sorry I
mentioned that \-- but in U.S. agriculture and then allow it to coexist
I think that\'s a very good pointed way to put it and, so, separating
existence from coexistence I think it is very useful but using it or
framing it in all of this and say value or the mention of it is also
important.

MS. DILLEY: Guy.

DR. CARDINEAU: Yes. Not to belabor the issue, but, I think Stephanie
made a good point. I think we should go back to the definition for
coexistence that we derived yesterday and it seems to me that our
purpose is to look at the juxtaposition of conventional agriculture,
biotechnology agriculture, and organic agriculture and this issue for
niche markets is irrelevant to that discussion in the sense that you can
just look at conventional agricultural load with regard to niche markets
or any interplay of those things.

So, I think that we are, again, crossing this boundary between
coexistence. I think Nick and Mardi\'s point that we could put a
positive spin on this is a good one but it has to be separated out
because it interplays with all of them. These are all things that could
act on every one but they don\'t have anything to do with the interplay
of the three subjects that we\'re supposed to be targeting from my
perspective anyway.

MS. DILLEY: I actually think the conversation just as the way it\'s
played out is of value because that\'s why there\'s a lot of heat
that\'s brought to this particular topic is exactly because of these
things are intersecting or interconnected and people are talking about
existence as well as coexistence and, so, I mean, that\'s part of the
insight from the committee to the Secretary and try to parse those out a
little bit.

DR. CARDINEAU: That\'s the point is that \--

MS. DILLEY: It may not be \-- it may be existence instead of coexistence
is still a big issue and it gets lumped into coexistence.

DR. CARDINEAU: As Michael has said, this issue impacts everyone. It
really doesn\'t matter what business you\'re in in agriculture, it\'s
going to impact them all, but, it hasn\'t anything really to do with how
conventional, organic, and GE or biotech come up against each other. It
doesn\'t really matter because everybody\'s going to face the same
problem.

MS. DILLEY: Michael, we\'ll take a short break but Michael wants to \--

DR. SCHECHTMAN: Yes, I have something hot off the presses and will be
considerable. I\'ll say that this is going to be of considerable
interest to all of you but I don\'t want us to talk about it. I\'ll tell
you what this is. This was put out for public viewing at two o\'clock
and what this is \--

MS. DILLEY: It\'s cooled down a little bit.

DR. SCHECHTMAN: It\'s old news by now. It is, APHIS has put out a
statement describing their existing policy on responding to low-level
presence of regulated genetically engineered plant materials. Yes,
regulated. This is not intended to be anything different from what APHIS
has been doing. It\'s just a description of what APHIS has been doing
and, of course, you all realize that they\'re going through this EIS
process in which this will be discussed further.

So, what I have here \-- so I have two handouts here. One of them is the
press release and the other is the policy statement and I will just pass
these out. And the other critical point about all of this is that to the
extent that you are all, many, many of you are representatives of
particular groups of interest there is a process that is being embarked
on now to do briefings for all of your respective groups and interests.

DR. MELLON: I want to congratulate USDA for not putting out a press
release at 4:30 on Friday.

DR. SCHECHTMAN: I tried to get them to do that but they wouldn\'t listen
to me.

MS. DILLEY: So why don\'t we come back at ten of.

(Whereupon, a brief recess was taken)

MS. DILLEY: All right. So, in the next half hour what we suggest is we
divide it up with about twenty minutes more discussion and then about
ten or so minutes talking about the work plan from here to getting
ourselves to the July meeting with a document that\'s prepared to be
completed, a paper that\'s prepared to be completed.

So, the one topic that we haven\'t touched upon about is in here and
that received a fair amount of comment is the section on regulatory
standards, compliance, and stewardship. But, first we need to get some
kind of convergence around terminology and then have a little bit of
discussion around whether this is similar to some of the other sections.
Is this an existence issue, a coexistence issue, and how to tease that
out a little bit more?

And you can see there\'s a couple of comments on the terms that Greg had
offered his sort of viewpoint in terms of sorting these out from the
regulatory standards and compliance and stewardship but I think even if
we don\'t \-- those may be the right terms you want to use, whatever
terms we are using, that we need to have some clarity about what we mean
when we use those terms.

So, that in terms of the terms themselves and whether they\'re \-- how
to frame that in terms of coexistence issues. Duane and then Guy.

MR. GRANT: So, I read the comments about, you know, I think he has a
valid point. I would maybe just suggest as a way to kind of keep intact
the thought process the committee used as we were putting this together
and culminating in Greg\'s concerns, you know, we kind of mixed and
matched regulatory standards and commercial standards together. I think
if you just kind of strike out that word regulatory, just call it
standards, then at least for the discussion that will kind of keep us on
track, his, Greg\'s write-in objections.

MS. DILLEY: We need to be specific in terms of regulatory versus
commercial.

MR. GRANT: Right. Further on, I mean, you can cut out specific
regulatory issues as we do farther on, but, so, \--

MS. DILLEY: Guy?

DR. CARDINEAU: I also agree with Greg\'s comment about regulatory
standards and I\'m comfortable with what Duane has suggested. I didn\'t
agree with him with regard to his comment on stewardship because I think
stewardship not only involves legal constraints and requirements, but,
also the legal thing, but, I think stewardship is simply taking care of
business. That is taking care of the whole issue and making sure that
you\'re keeping up with what\'s going on, whether or not it\'s mandated
by law or whether you\'re doing it voluntarily is irrelevant.

MS. DILLEY: Both required and voluntary.

DR. CARDINEAU: Right, which I think is the way it\'s the way it\'s
described here I think is correct. I don\'t think his definition is
correct. My personal opinion.

MS. DILLEY: Nancy?

MS. BRYSON: I agree with Guy. I think that\'s right. I think a good way
to think about stewardship and something that helps us with the
discussion we\'ve had is thinking about it as for cradle to grave, how
do you take care of the thing it is that you\'re raising, whether it\'s
GE or organic or whatever. Some of those are going to have legal
complaints on it, but, a large part of stewardship, especially in how we
relate to each other, what the infrastructure, things like that.

MS. GEISERT: I think stewardship is the regulatory standards of not only
what we have to do but we do to take care of business is a broader
discussion so I think that has been where some of the discussions have
been so I like the idea of keeping it in at this point.

DR. SCHECHTMAN: To be clear, to define stewardship as including both
compliance and additional measures that companies may take.

DR. CARDINEAU: I think it\'s described that way. I mean, it starts off
voluntary, including voluntary and adopted codes of conduct and
regulatory standards. So, I believe that the definition that\'s in here
is okay.

DR. SCHECHTMAN: Okay. Probably too, I would just guess to make Greg
happy, we\'ll have to say for the purposes of this paper.

MS. DILLEY: Okay. Now that we\'ve clarified terms I mean one aspect of
this seems to me to go back to Randy\'s point about the whole how you
\-- because what one player does affects other players in the whole
grand scheme of things that that\'s one aspect of these pieces that can
be brought out. I don\'t know if there are additional things that people
wanted to highlight in terms of coexistence issues or any other pieces.

Nick?

MR. KALAITZANDONAKES: I just wanted to make a comment that to me some of
this text belongs to the introduction. In other words, in a sense we are
setting up and what\'s the underlying structure to the issues that we
are talking about and then go to what\'s \-- I\'m not going to say pinch
points or what\'s working \-- whatever the word we\'re using today. So,
to me, a lot of this text belongs to the front side of the report to
provide the context.

And then in addition to that it actually will have in terms of actually
rationalizing the amount of the writing that\'s in here because there\'s
a lot of repetition at the end of the day when you are actually writing
in a more concise way and you move some stuff up front then you have a
summary to connect, repeat statements, or connected statements at the
end to draft it that way.

MS. DILLEY: Some of that is in the compilation. Any other pieces that
would specifically be in the coexistence as an issue for coexistence
piece?

DR. DYKES: You\'ve got the regulatory standards issue again down at the
very next section which I didn\'t understand why we have regulatory
standards in two different places again.

MS. DILLEY: Because of the compilation of the document and also we\'re
talking about what we wanted to reference in the reports.

DR. CARDINEAU: I thought one section was definition and the other
section was the explanation.

MS. DILLEY: It\'s a combination of all of the above.

MR. GIROUX: Never having wrote this we basically felt compelled as a
subgroup that we had to define what we were talking about and then we
just simply pulled from the existing report pieces that we considered
relevant.

MS. DILLEY: And then the question is for the purposes of looking at this
as a coexistence issue is there anything that we need to highlight,
whether it\'s referencing that particular section of a previous report,
or, empathizing or taking a different angle with regard to coexistence?
And that\'s kind of the question. Maybe this is a good compilation of
things we talked about in previous reports but we don\'t need to keep
them here.

Duane and then Nancy.

MR. GRANT: I think number one the issue we discussed yesterday we have
to be consistent which is what we decided yesterday because we
identified this as a comprehensive domestic policy and we don\'t want a
domestic policy \--

(Discussion off the record)

MR. KALAITZANDONAKES: What did you say? It\'s fine, Michael, is that
what you said?

MS. DILLEY: It\'s an AP policy but not thresholds.

DR. DYKES: Which is what we just got today.

MS. DILLEY: It\'s a reaffirmation of the AP policy.

DR. DYKES: But it has no threshold.

MS. DILLEY: Right. Nancy.

MS. BRYSON: I think this section needs to be re-thought out and the
introductory section in terms of what we\'re saying because, you know,
Duane was pointing out that the charge for our committee was kind of
vague and we had looked through these reports and these are things we
think might be relevant. A lot of this in here may no longer be relevant
based on what we have now determined are, is driven by our definition
and what\'s going to be in factors enabling coexistence and factors that
are inhibiting it.

So, it\'s hard to look at this text and sort of say this things are
related and these things aren\'t. I don\'t have a problem in my own
brain on this page with all we\'ve done today, but, I think that\'s
going to be helpful in terms of editing it to make it meet the charge.

MS. DILLEY: I think Duane\'s point is well taken that we need to have a
document that reflects the conversations that we\'ve had over the last
two days and then take another fresh look at these and either recap some
or some maybe eliminate it or whatever in terms of processing that
conversation to look at the \--

MS. BRYSON: It seems to be in this session. We really have moved away
from the other reports in a more productive way, you know, relative to
the first session.

MS. DILLEY: Michael and then Sarah.

DR. DYKES: The point 2 under the gene manipulation. I guess, as I said
in my comments, I don\'t see that in coexistence. Also, it seems to me
if it is it\'s in an undefined category. It\'s not biotech, it\'s not
conventional and it\'s not organic which I don\'t know that we have a
fourth category.

MS. DILLEY: I thought it said manually processed.

DR. DYKES: It says organisms. Then we got a whole list of other things
there that we can bring into place. I don\'t \-- my suggestion would be
to delete that.

MS. DILLEY: Sarah.

MS. GEISERT: Sitting here looking at the response about how Randy feels
about farming and your term and it also speaks on point 3 and I\'m
wondering just in general, you know, I don\'t know if it\'s exactly a
coexistence question, but, you had state versus federal systems. You
have country versus country differences and they impact different
decisions. Organic standards in one part of the world are different than
here. You know, California could be different than Washington State.

So, I think these public ballot initiatives are also sort of a bigger
context of some of the challenges that are faced when you have competing
standards or standards less than true were developed so it struck me in
reading that and in listening to the earlier conversation one of the
challenges that gets faced on all these segments is lack \-- but lack of
equivalency of standards or something.

I think as you look at the public ballot initiatives, I mean, part of it
is the context of whether it\'s state to state, you know, province to
province, country to country, but, I don\'t know if it\'s a coexistence
issue because it\'s been there today. I mean, it does not help
facilitate some of the processes of some of the decisions that we make.
It complicates it on what we choose to do and why we choose to go where
we go because we\'re not. We don\'t have harmonized standards that allow
\-- you know \-- transparency information. It complicates a whole host
of things.

Now what goes on in the U.S. if you\'re exporting. I don\'t know a whole
lot of other markets, so, that was one. I didn\'t know if you wanted to
pull some of these out.

DR. SCHECHTMAN: I was going to say that part of that whole initial
description that was mentioned earlier about the extent to which export
things in part drive some of the concerns around coexistence in the
United States.

DR. DYKES: It\'s part of the context.

DR. SCHECHTMAN: It\'s part of the context.

MS. DILLEY: Nick and then Daryl.

MR. KALAITZANDONAKES: I agree with Sarah. This is a coexistence issue in
my view. The financial standards are driving a lot of the coexistence
issues we have.

MS. DILLEY: Financial standards, did you say?

MR. KALAITZANDONAKES: Differential standards, yeah. Both from the
international level but also at the local level. And, so, I think it\'s
important we set that up as a factor of influence in consistency.

MS. DILLEY: Daryl.

DR. BUSS: As written and as was used in the past this was it leads off
with public ballot or legislative initiative, but the rest of it, it
would seem that some of the other moratorium on growers would be exactly
the same.

MR. KALAITZANDONAKES: That\'s local and you can see from the other side
too because there are 17 states today that are trying to standardize
their seed regulation.

DR. BUSS: Right. I think it would need to be included in that because
our original context was really community and areas like that.

DR. DYKES: To me, many of the things in this section come back to what
Nancy said. If you look at the section trying to talk about issues and
other reports and it almost seems to me if you build it in the context
of this as your discussion about there are many of the topics in this
coexistence paper that have been touched upon and other reports the
committee has written that we include such topics. But, three or four
sentences could capture the intent here without repeating the same
things that have been throughout this report and give us the context.

To me, that\'s the way to handle this in my view.

MS. DILLEY: Anything else on the regulatory standards? Otherwise we can
move into the compliance issue section and comments. Yeah?

DR. DYKES: I also agree with Greg.

DR. CARDINEAU: Yeah, I would agree. I don\'t think it\'s a coexistence
issue. It really has an impact on how the market\'s going to see and
treat these particular GE products.

MR. GIROUX: I disagree.

DR. DYKES: You disagree, it\'s a coexistence issue?

MR. GIROUX: I think it\'s a coexistence issue between commercialization
and biotech crops as one segment of the industry and the export market.
And they need to coexist because there\'s staples in the same chain, if
one part of the industry acts unilaterally and impacts someone else then
for sure that becomes a coexistence issue.

DR. DYKES: I can see your point. I guess it could be worded better than
this. I guess just the thought of seeking approval was what jumped out
at me but the way you describe I see the impact you\'re talking about.

DR. CARDINEAU: I think seeking those approvals are a real problem for
the GE stuff, but, I mean my thinking was it\'s an issue with regard to
the GE. I wasn\'t really thinking about it impacting conventional
markets as well which is where you\'re going. Is that where you\'re
going?

MR. GIROUX: Yeah.

DR. CARDINEAU: So then I think some better wording might be required.

DR. SCHECHTMAN: Didn\'t you talk about this before in terms of one part
of the food production chain, decisions by one part of the food
production chain. I mean, we had that discussion before about risk being
much more fluid along the chain and maybe it wasn\'t before.

MS. DILLEY: How about the compliance issue section? Again, that\'s drawn
from other reports. You may want to look at it. Michael?

DR. DYKES: I guess and you put these things in these reports so
obviously we all agreed to them. I just don\'t know that we need to go
through and rehash them as much as we are. I mean, that\'s why I come
back to simply stating that we have addressed many of these topics in
other reports. I think we can do what we\'ve tried to do here in three
or four pages and probably two or three paragraphs at most.

MS. DILLEY: I think you\'re right. I think the groups has to do exactly
that is to say, okay, let\'s not rehash what we did and then is there
any particular thing we want to draw from that as coexistence piece of
it.

Duane?

MR. GRANT: I agree with you, Michael, and I think that what our job is
from a larger group is, you know, these are issues that we pulled out
from the earlier document that are actually related to coexistence. If
they are then we\'ll check them off and we\'ve already got them
accommodated elsewhere in the document. If they\'re not included
elsewhere in the document then we\'ll somehow incorporate them so they
can flow with this document. I think it\'s just kind of a gap in and
what\'s out affirmation really is what we\'re looking for and not just
another rehash.

MR. GIROUX: Duane read my mind. We just need some direction, what\'s in
and what\'s out.

MR. GRANT: Because we\'re pretty liberal on what we allowed in.

DR. DYKES: I guess I would tend to agree with Greg on number 3 under
compliance. I also wonder about all the stuff. As I\'m looking at it
I\'m trying to think more in terms of the three different systems come
together more so than one particular than the other except we\'ve talked
about the importance of it.

I guess I could go either way. I\'m just not sure that we need to spend
a lot more time on testing methodologies. It\'s very important and very
unique but I\'m not sure that in the overall coexistence that we need to
spend a lot of time on that.

MS. DILLEY: Any other comments?

DR. DYKES: And I could almost see we could capture the question you\'re
all asking, what\'s in, what\'s out. I could see where we capture a lot
of these by just saying there are many topics such as da, da, da, da, da
that were covered in other reports, T&L, such and such and such and
such.

MS. DILLEY: All right. Same on the stewardship issue section; other
reports, and quickly additional issues under those categories?

DR. DYKES: And, to me, again, and I know why, but many researchers (sic)
repeat the previous section. I don\'t know whether they intended it or
the committee requested it and so forth.

MS. DILLEY: Let\'s move on with everything. Okay. Anything that
particular struck you, because some people haven\'t had a chance to
comment? I just want to get some immediate feedback. Again, these were
grouped under compliance and stewardship. Nick?

MR. KALAITZANDONAKES: Abby, I think the best way to do this is, after
we\'ve had a chance to streamline the document, take another look at it
with, precise because I think the overlap of ideas is so much at this
point, especially in the last two, three, four sections that I can argue
each and every subject that is there from both sides and so \--

MS. DILLEY: I think so.

MR. KALAITZANDONAKES: So I think that after we\'ve had the chance to
streamline this and make a little bit concise, a little bit more
structured it\'s going to be a little bit more, easier to take it to the
next step.

MS. DILLEY: Yeah. I agree. Mardi and then Brad and then we\'ll take your
comments and change to the work plan next up.

DR. MELLON: Well, I agree with that suggestion although I would like to
\-- I\'d like to think of a way for the document to discuss some of the
\-- you know \-- in greater detail some of the potential, maybe not
solutions, but approaches to some of the coexistence issues, some of
which were in the materials that were presented to us that have been
worked out in Europe, zoning growers, rezoning. You can put out the tax
idea and pop it back down again. But, you know, there are ideas that are
out there. I think it would be appropriate for Stephanie to describe in
some greater detail how the papaya people do it. I mean, they are
managing a coexistence issue by, you know, some sort of crop-
appropriate protocol that enables both of these to market.

So, I\'d like to lay some of those out, not that we are recommending
them, or, we\'re saying that they\'re going to work, but, that are at
least ideas out there that could and should be used.

MS. DILLEY: Brad?

DR. SHURDUT: The only observation I was going to make and kind of sets
up the solutions-based area is we talked early on about recommendations
and when you look at the additional issues to be addressed it looks like
there are a lot of recommendations and should be by USDA. We just need
to discuss it as a segue to what the discussion is; how much do we want
to do in terms of recommendation area? This might be resolved as we get
into recommendations than if we don\'t get into recommendations.

MS. DILLEY: Right. So, I would suggest that in the next wave of a
document that we wouldn\'t have recommendation-like language that we try
and scrubbed. We spent a lot of time in previous trying to finalize
previous documents, taking that language out, trying to flush out some
variant points and then to the degree as we talked about yesterday, if
there are \-- if we get to the point where we have something to say and
we\'ve got some agreement on any recommendations that that would be kind
of the icing on the cake as opposed to the goal.

So, if we can put things that way.

DR. SCHECHTMAN: With the exception of the framing of letting agriculture
\-- not having this be a zero-sum game; that that\'s sort of a general
kind of framing that is a quantitative recommendation.

DR. MELLON: We could lead by doing it.

MS. DILLEY: We could what?

DR. MELLON: Lead by doing. I mean, we can discuss this in that positive
frame or we can discuss it in a more of a \--

MS. DILLEY: I think people are amenable to that positive thing. Nick,
Michael, and then we\'ll talk about the work plan.

MR. KALAITZANDONAKES: I just want to comment on Mardi\'s last point and
I think if we start getting into detailed examples like, for example,
grower districts and so on, we\'re going to spend a lot of time and
discussing the issue and I\'m not sure that we will reach any sort of
agreement because any one of those single solutions, if you want, have
both supporters and detractors for a variety of reasons.

DR. MELLON: I don\'t think we should say we ought to do, that we think
they\'re going to work, but, I think that listing the idea that there
ought to be. I mean, the farmer-to-farmer idea that we ought to make
possible. Farmer-to-farmer communications. There are lots \-- that idea
has lots of ramifications that we could, you know, just flush it out in
a paragraph, the idea of zoning. You can flush that out in a paragraph.
It can either be voluntary among growers or more than that, I don\'t
know. But, I do think there\'s a use to listing.

I don\'t think people know how the papaya growers have made it work
without recommending that this is necessarily the way to go.

MR. KALAITZANDONAKES: My point is very simple. We\'ve actually gone
through quite a bit of discussions and arrived at the conclusion that
generally speaking in the United States coexistence has been taking
place for a while in my view and has been generally successful and has
been market-driven.

And there are a lot of different practices. Grower districts would be
very low on my list of how you get there and in addition to that it
would be loaded with all kinds of potential shortcomings which have been
discussed both at the local level, at the state level, and in courts of
law. So, my point is that some of this would only make the discussion
more difficult, not easier, and I\'m not sure we\'ll get very far.

MS. DILLEY: So, I think in my mind there\'s potentially the difference
of being illustrative in terms of talking about coexistence as
happening, why, and making an exhaustive list of all the different tools
because then I think we would get into is it really comprehensive, are
we setting priorities. I think there\'s a difference between those two;
whether we can use those examples to illustrative I think that\'s what
we\'re trying to do and then if it doesn\'t work then it\'s purely
anecdotal and give no examples.

DR. MELLON: I would resist a report that basically is there are no
problems, nothing needs to be considered to be done so that\'s just \--
you know \-- I don\'t think we\'d go that far, but I just want folks to
be clear about that.

But, the other is that if we\'re going to look ahead to some sort of a
marketplace that involves GE fruits and vegetables, for example, but
works, now I think almost isn\'t going to work, and looking to the
papaya example I would think would be \-- you know \-- would be very
appropriate.

MS. DILLEY: Michael, you had your card up and then we\'ll call it day.

DR. DYKES: I was just going to say I think we\'re coming back and
putting more of this in the introduction in the context and I know the
comment is potentially bigger than the paper, but, I think if we think
about how the thought patterns have evolved of this whole committee I
think we all started off there are countless problems with coexistence
all across the board and it was primarily a GE and organic or limited.

I think as we had the speakers come forward, I know we\'ve all broadened
our horizons on exactly what coexistence is, the length of time
coexistence has been going on, a number of different practices in
different areas that have to address it. White corn, sweet corn, and all
the different things in the marketplace. So, I think given that context
in the introduction of the chapter is important and reflective of kind
of the evolution we\'ve made in the committee because if we\'ve learned
anything in these presentations that we\'ve had, which I think has been
the best set of presentations in terms of change is the most
comprehensive thing, I\'d say a reflection of where we\'ve come, that
there are lots of things that one needs to understand and consider to
have a context to start looking at coexistence and it\'s not as
straightforward as GE, organic, conventional, but, there are lots of
other ramifications and it\'s going to continue to evolve over time.

And, so, our introduction may be a lot longer than what we actually end
up because this is important for us, I think it would be important for
anyone else reading this chapter on coexistence. There\'s a lot of stuff
you need to get in context before you start thinking about how you\'re
going to fix whatever you perceive coexistence problems to be, not that
there aren\'t any, but, you might be surprised of all the things that
take place today that address these already.

MS. DILLEY: Okay. So, it\'s twenty five after and the work plan I think
is short but important and that is that I think we, we being staff, will
take a cut at trying to take what we\'ve heard over the last couple of
days and turn something around that\'s another paper, another draft of
the paper, hopefully trying to capture, reorganize, and do what we\'ve
discussed.

We\'ll try to put that out around mid-April at the latest and we need a
tight turnaround because it\'s hard for me to imagine a work plan
without reaction back to that and we\'ve been, frankly, a little sparse
on reaction back to things that we\'ve put out there and what I don\'t
want to do is have you geared up for one more meeting and then we just
can\'t accomplish it because, oh, yeah, I didn\'t get comments back and
then we have a lot of problems with this report.

Because we want to accomplish this in one meeting so we really need to
stress the importance of getting feedback from you so then we can make a
work plan based on that that will get us to the point where we\'re
editing a final paper at the next meeting. Alison?

DR. VAN EENENNAAM: So I understand what\'s going to be done with the
numerous edits that were in here where there were different things put
in, are they going to be left in there so it can be put in later?

MS. DILLEY: We\'re going to have to have probably two documents. I
imagine we\'re going to have to have this to remind you what we\'ve
dealt from. You have the meeting summary and then you\'ll have some of
the comments trying to integrate the conversation we\'ve had over the
last two days and a revised document.

But, we obviously didn\'t thoroughly go through every piece of this
document and we don\'t want to lose that information so it\'s just
sorting through how we present that information to you to look at and
say, you know, you really forgot to pick up this point and just because
we didn\'t talk about doesn\'t mean I don\'t think it\'s important. But,
I imagine it\'s going to look like that, two documents is our best plot
and then merging and then having the whole document for your review.

DR. SCHECHTMAN: It\'s safe to say that the new document will not look at
all like this one. We\'re going to try to see where in the new framework
that some of these things, the existence versus coexistence scene
setting pieces, how things are going to get moved around. We\'re going
to try to eliminate duplications and we will forget some stuff and
you\'ll tell us.

MS. DILLEY: Don\'t wait until the meeting to tell us that. I really want
to emphasize a Jerry McGuire saying, help us help you reach your goal,
by completing this at the next meeting, okay, so, we really need to hear
back from you.

DR. DYKES: As I read these documents, and I saw a lot of agreement
around the room, it\'s a pretty good foundation to start from.

MS. DILLEY: I started capturing what we had talked about yesterday and
then we built on it today and we need to turn that around. All right.

DR. SCHECHTMAN: Thank you all.

(Whereupon, at 3:29 p.m. the meeting was concluded.)

[]{.underline} Digitally signed by Beverly Jason

[ELECTRONIC CERTIFICATE]{.underline}

DEPOSITION SERVICES, INC., hereby certifies that the attached pages
represent an accurate transcript of the electronic sound recording of
the proceedings before the

United States Department of Agriculture:

ADVISORY COMMITTEE ON BIOTECHNOLOGY

AND 21ST CENTURY AGRICULTURE

By:

![](media/image1.png){width="3.0458333333333334in"
height="0.8909722222222223in"}

Beverly Jason, Transcriber