It was a period in which we decided to get ice berg from California year round. It didn't matter if it was white and tasteless or whatever. At that point and time we were just excited. That was really neat for us in the midwest to get lettuce from California. Today our foods that are grown domestically generally travel between 1300 and 10000 miles and exchanges hands five to six times before it reaches our tables. As it travels, it uses resources, it loses nutrition and it loses taste. It becomes a very anonymous, faceless, tasteless food supply and that was before getting NAFTA. We also now have the circle of poison and how many of you know what the circle of poison is? Okay for those of you do not, the circle of poison allows chemicals that are produced in the US which are banned in the US to be exported to other countries used on the food production there and then the food is imported back into our country. That's the circle of poison. Changes also came in the food itself since most of this food is changed so much from it's natural form, we often don't know what we're really eating. We have little sense of how it's raised. There is virtually no communication with the land or the farmer. A little story that I like to tell is - Last summer when we were working hard in the garden, we were hungry and we didn't want to cook and I sent my husband up to the little local gas station to get us something to eat for lunch. He came back with this little plastic pack and I opened it up and started eating it. There was no texture, no taste and I got back the package and looked at the little label on it. It was supposed to be a cheeseburger well technically it probably was but there was no hamburger in it but it had a slab of cheese on it. It was a soy burger. But I would think that many times that would tell us that we really don't know what we're eating. We think we've got one thing when we really got something else.

The number of products that fill grocery stores has grown from over 40,000 while at the same time the diversity of the food has diminished significantly. For example, the varieties of apples grown in New York use to be over 200 now there are only a few. The same is true with nearly all of our foods. The genetic diversity in seeds and livestock is becoming much more limited. According to Bill Helfernun a sociology professor at the University of Missouri, who tracks agra business. He's got some really wonderful statistics. Two tenths of every food dollar goes to one food company. Who knows who that one food company is? Philip Morris. His research reveals that Philip Morris is known as what we used to call multinational companies, now we call them transnational corporations have potentially more control over our foods system than over our political system. When we look at food systems as a whole we come to realize that there are major problems with our current food system. We no longer have a diverse ownership of the land, seedstock varieties available, livestock genetic diversity and what is readily available if dependent upon chemicals made by the same company who produces the seed. Farmers buy their inputs from the same people they sell their products to in most conventional farming operations. So what are our options. These folks are going to talk about cooperatives and I just like to mention that there are some. There are things like community support agriculture, church support agriculture which is a similar thing. Those are called CSA's, direct farm marketing, farmers market, subscription farming, roadside stands, home delivery routes and so forth. The current system that we've got now will most likely always dominate but these do offer alternatives to those who choose to use them. My sense is that to change this system that we now have in place is going to take all these different models to create a more diverse system. A more secure system. No one method is going to work for everybody. You have to pick and choose what works for our particular operation. The CSA model came to us from Japan where it was begun in the 1960's and it really came because the women there were really disturbed when the saw what was happening with their food. I noticed an increase in imported foods, the consents to want to farmland once again, and the migration of farmers to the cities. And a group of women approached some local growers and said, "Would you be willing to grow some food for us if we paid you up front?" And that's really how it began.

It's called tikah. But this innovative approach made to the US in the mid 80's about 20 years later. America was in the debts of the farm crisis, many farmers were struggling with the financial realities of agriculture whether it was conventional or market gardening and they were looking for alternative financing options. This structure freed them from the worries of making those ends meet so they could focus on what they did best - which was to grow food.

In the summer of 85, this version made it to Indian land farm and it has grown substantially since then. That is hundreds and hundreds of farmers across the country are using the CSA model while thousands and thousands of customers. I think in light of our time constraints I'll stop there. If there are questions about some of these different models I'd be happy to answer those questions.

I think it's a great idea if we hold the questions to the end that way we'll have each of you ask each of us of things that you think of so with that I'll begin. I have a couple of overheads. I'm going to narrow them down since we have less time. I think we just got a pretty good overview of the thing that the farmer's union is calling concentration and it's happening not just in the food processing industry but also in credit services, banking industries, financial institutions, the mergers that we see. The telephone companies. Fewer and fewer firms are controlling more of the opportunities and the really good presentation that preceded this one talks about how farmers are finding themselves in the position of monopolies, which is the position of having very few people to whom you can sell your product. So what I want to talk about is ways to overcoming that basic problem which is the sale of a commodity item. If we look a little bit more closely at the way agriculture is structured when we're selling commodities, it comes down to selling our labor. Farm labor is paid very very very low wages and so somehow we have to start selling the product that is not just the product of our labor and that's where the ideas of cooperatives come in. Because by vertically integrating, if you have a farmer controlled operation that is vertically integrated you're able to spread cost over a much wider array and so you can kind of search things to the point where you are able to actually realize some of the value that the people are buying commodities are realizing. And we heard the statistic earlier where 14% in the processing area and 2% at the farm level so we need to be getting in to some of that 14%. This is not a new idea. Packers and Stockades Act is a law which was passed to control the concentration in the meat packing industry in the 20's and things have not changed much since then. Farmers Union started organizing coops to empower farmers as individuals to have some of the same market opportunities that large cooperations have. There is a landmark case called Maryland and Virginia which is about a dairy coop and in that case the judge held that the reason for the antitrust exclusion for coops is because the coop is designed to give individual farmers the same market opportunities as large corporations. So this is just a kind of funny picture of the early farmers union petroleum farm supply coop and that developed into something that some of you may be familiar with. This is at Senex Station and I don't know if many of you are probably familiar with Senex which is a coop that has now grown even larger.

There has also been a similar type of corporate growth in some of our coops. This is not the model which seems to be working for many farmers. As I travel around, I'm the director of Coop & Economic Development for Farmers Union, I often get producers that say to me, "My coop is not working for me and that my coop is not giving me a fair price." This is a disturbing phenomenon which I think relates back to what we were talking about earlier of producing commodities and the coops are constrained by the same market situations that the large Philip Morris type of corporation are constrained by. Unfortunately they don't have the access to capital and the access to foreign supply product that Philip Morris does. I was, for example, at the World Food Summit in Rome and spoke with a person from Uganda and he said, "Oh yeah we're now working with Dole to export organic product into the US because Dole wants to start marketing organic product." This just sent a chill down my spine because it meant that those mixed markets that those organic producers have worked so hard to develop and direct marketing, CSA's, all of these things that we have just broken our hearts and our hands to build are now going to be cut as value added opportunities for some of the other large mega food corporations. That's really disturbing. So how do we get around it?

Farmers Union members in North Dakota helped to organize a coop that has been doing phenomenally well. It's called Dakota Growers Pasta Company. Many of the labels say Dakota Pasta Growers. The farmer members that set this up decided that they wanted their name to reflect the idea that they would no longer just produce in commodity wheat but instead now we're producing a consumer level pasta product. So they became instead of wheat farmers, pasta farmers. It's a little disturbing to think that the future of farming is not in producing wheat but instead in producing pasta and this is something I grapple with but it's an unfortunate reality. The beauty of the coop though is that the wheat farmer by pooling their resources were able to hire a marketer who was their employee. Instead of telling them what to do they told this marketer what to do and the marketer has been incredibly effective they have just done much better than what was originally anticipated. Taking this model which many people call new wave or value added type of cooperative I have began working with other groups of farmers with other Farmers Unions states to help them do some of the similar types of things and this is really about taking this image and I'm going to talk about two products which are related to cheese and this is an image in which consumers need to identify with in agriculture. This fellow is french and he produces cheese in France which is kind of the basis for two of the coops that I'm working on at the moment. One in Wisconsin with some Wisconsin dairy producers and open in Texas. This image is not about labor producing a farm commodity. This is about farmers producing food in a way that is beneficial to the environment, beneficial to animals, and it sells very well to consumers. This is what consumers need to see and think of when they're buying their product. As we talked about earlier when people buy chicken they think Tyson; when they buy beef they think McDonalds, they're not making that connection back to the farm and back to agriculture. There is tremendous value in that and this is the image that I think that we need to start to get back to. We need to start have people think of farmers producing food not producing commodities. So in France De gaulle said, "How can I be expected to run a country that produces over 350 different types of registered cheeses." Here is a picture of just a tiny sampling of some of those cheeses. This gave me an idea because each of the cheeses in France has a regional identity. It cannot be produced anywhere else and they have interesting legislation in France that forces that producer to certify on his cheese that it came from a particular region. So this means that regional production is protected. The same cheese can't be manufactured somewhere else. This is a wonderful thing for dairy farmers because it means that instead of shipping milk from New Mexico to Texas or to someplace else all production is regional and local and you're actually marketing that local identity. So there's room from many different types of cheeses from Wisconsin, cheeses from Texas, the whole gamut. So we begin looking at the situation in Wisconsin. There is some wonderful existing small cheese plants that depended on their local dairy farmers for their milk. Although those plants are beginning to go out of business. So we're looking at working at a joint relationship with them as a coop to have them continue to produce the cheeses but under the farmer label. So that's one project in Wisconsin. Then we're doing a similar thing in Texas except that we're actually looking at building a plant there to produce Hispanic cheeses. The reason why we're looking at Hispanic cheeses in Texas is because there's growing middle class Hispanic population which is unable to find what I call authentic Hispanic cheeses and there is a big demand for it that's not being met. So we're seeking to meet that demand.

I want to talk about this and to be correct this cow should not have horns so you'll have to forgive that. We were going for the image that's presented here of bringing back the farmer into consumer level product and this is a really interesting beef project that we're working on in Pennsylvania right now. The flowers are black eyed Susans which are the Pennsylvania state flower and in this project the entire carcass is slaughtered at a small local slaughter facility. This facility does one carcass per day and the prime cuts are marketed through gourmet restaurants, very small scale and on the menu it says, "This beef was produced using no antibiotics." As a coop we set quality standards that relate to the production of it that could be put on the menu. This is local produced, no sub therapeutic antibiotics, no growth hormones and then the remainder of the carcass is being turned into Sunday potroast dinners and some packaged foods that are being sold at a higher end retail market. These a proposed packaging so this is a proposed look for it and you notice the same logo at the bottom and this is just a markup, this isn't our final choice because obviously potroast would not be in chunks but in any case you get the idea. These are sold in a cryovac package which is done at the slaughter facility. There is a small kitchen at the slaughter facility as well and then marketed in the case next to the beef product in the supermarket. I'm going to end here because we're running out of time but I do want to say two things we've been incredibly fortunate because many of these projects have been funded with grants from the USDA and USDA has been really visionary in some of the projects that they're looking at funding and these are some examples so I'm very very grateful for the opportunity given by USDA. And finally, I'm working on some other projects but I'll omit them for now and if you have questions later feel free to ask.

We made a decision earlier on that we would leave plenty of time for questions and answers because that's where a lot of the good stuff comes out so that's why we're trying to keep these brief.

Okay what I'd like to do is talk to you for just a few minutes today about some of the things which are going on at the US Department of Agriculture that relate really to a lot of what you've already heard about this afternoon. Perhaps by way of additional contacts it is interesting that I've been involved in agriculture most of my life and have been with the Department of Agriculture for almost 20 years and I must say to you that the world is changing, certainly outside of USDA but I think also inside USDA. Our vocabulary has been expanding fairly rapidly I think. Things like niche market, direct marketing, and farmers markets which I guess always were there find a much more prominent place in day to day discussion around the department and in the focus for the work that we have underway. Also I think by way of contacts it is probably a fair assessment that US Agriculture policy more generally the actions by USDA the land grant system which I think were largely consistent with USDA policy did have if you will kind of a large farms bias. I don't know if it was a bias so much as it was a full blown emphasis on efficiency and the consequences of that I suppose are somewhat straightforward. We only have to look around but of course you're not unique to agriculture either. Some of the data which was shown earlier which showed some of the concentration which has taken place in all kinds of agricultural industries and has indicated really beyond agriculture is something that is pretty characteristic of our economy so I don't know if agriculture or USDA was necessarily out of step with what was going on in the larger US economy but I think arguably we've gotten to a point where at least additional questions are being raised. Size has become an issue and certainly I think that gets reflected in what we're trying to do and the kinds of questions we're trying to address these day. As you're probably aware if you follow US Agriculture Policy on the broader front that policy underwent a major change really beginning in the 1980's but perhaps finished off in the 1996 Farm Bill where the traditional programs that we've had particularly for the grains but also for dairy will be no more. Farmers basically will be asked to fend for themselves in the marketplace. Now there will be other programs around like crop insurance and other kinds of things but at least in terms in basic price and income support there has been kind of a quantum shift in the role which government perceives itself to play at least in terms of the kinds of programs that historically have existed. And in a way I think that's put a premium on the need to think about them in the absence of those programs what are the issues which farmers are going to face? If there is going to be a place for public policy as it relates to public policy what it that place going to be? If we are going to have programs what are they going to look like. I think there is a lot of soul searching really going on at the moment. It may have already been raised to you during the conference. A couple of recent reports that came out through the department one which you guys are already aware we had an advisory committee a couple of years ago which looked at the issue of concentration in agriculture. Some of you may have been involved in that or had opportunities to testify at those hearings that were held around the country. We're fundamentally asking this question and really if you get down to it, where are we going? What does the system look like? What does it mean? And where are we going?

In similar fashion more recently the department put together a national commission of small farms and some of you may also be aware of that particular report. Lots and lots and lots of recommendations in there and I can tell you that they are receiving very serious attention within the department and I think within not a very distant future the department will be coming out with announcements as to what kind of follow up we think we can do within given authorities, budgets, and those sort of things what it is we think we can do in response to the recommendations that are in those reports. So as I said, I think things are changing and if things are changing in the economy, things are changing in agriculture be the farms in questions or the farmers in question, large or small, as I mentioned our traditional farm programs are going away. The global market place is a reality that will impact anyone in agriculture either directly or indirectly and has been indicated in some of these advisory committee reports suggests concentration is also a reality. Again what is the question in terms of what are we to do about that? What can we do about that but all those factors I think are bearing on where do we go and in particular where does the US Department of Agriculture go? I think it's interesting that some of the data cited in the small farms commission reports point out for example, all definitions are ultimately arbitrary if one defines a small farm as farm having less than $250,000.00 in annual gross receipts that something like 94% of the farms in the United States would qualify as small farms. Collectively they generate about 40% of the cash receipts in agriculture. If you can flip that around then of course what that also says to you then is that you got 6% of the farms that are generating 60% of the gross receipts. So certainly within the production sector of agriculture we have some fairly significant concentration just as we do going up the marketing stream.

The 1992 Census of Agriculture reported that around 85 to 86,000 farms around the United States were involved in some type of direct sales of their agricultural products. Now how good that number is I'm not sure but if you take it as a point of reference at least, I think it's interesting that the gross sales from those farms are something on the order of $400,000,000.00. A fair piece of change. Now granted among those 85 to 86,000 farms who were marketing directly you're going to have some big ones as well as some small one and so I'm not here to tell you that four hundred million is spread evenly, but it does say that those who have found ways to market their products directly are generating some pretty significant revenues. And I think that probably one of the questions before us is what is going on there and perhaps a related question is are there some things happening there which can be picked up on and applied elsewhere or applied by others who are also interested in marketing their agricultural products. Within the agricultural marketing service at USDA we had actually for quite a long time had a program where we've worked with states and communities developing wholesale markets, terminal markets, farmers markets. In recent years while a lot of that work is continued we've also begun shifting emphasis a little bit with a much greater focus on farmers markets as perhaps we've begun to think of them as kind of formal structures and more like what happens in a parking lot on a Saturday morning. We've also begun to think about situations like redevelopment of urban downtowns and creating opportunities of the marketing of products in those kinds of situations. So we've begun picking up on a lot of things and our longstanding program is really beginning to track a little bit differently. We still think it's important that there be wholesale markets so that product can move around this country efficiently but we're also I think coming rapidly to the recognition that more of the context of direct marketing, farmer to consumer type marketing there is need for help to the extent that we can give it in creating those sorts of direct marketing opportunities. A number of them have already been mentioned here this afternoon, certainly farmers markets play very prominently, public markets more generally, and there are also things like roadside stands, pick them yourself type operations plan, there's subscription farming and a whole variety of things which are really starting to play more prominently and are things which we're beginning to pay a lot more attention to.

As we've looked at this and tried to give it some thought we have begun to put some thoughts together and I'll kind of preview for you in the next couple of minutes some of the things that we've done or that we're sort of in the process of doing. One of those as I've mentioned is farmers markets and for us over the last couple of years in particular that has become a very big deal. We have a weekly farmers markets on a parking lot at USDA Headquarters now. In fact, Thursday opens ups our season and it will run through fall, sort of based on the model that I guess we kind of originated on federal property the Department of Energy and Transportation also now are holding farmers markets. It's either weekly or biweekly. We're in conversation with the State Department and the Department of Defense. I mean everybody is getting on the bandwagon here. I'm a little concerned that we're going to be crowding everybody out at some point but for the heck of a lot of interest and we're really preparing to take that nationwide. We've put together materials on how to start a farmers market on federal property, for example, which has been shared throughout certainly the USDA system so that our many offices around the country who might have an interest and have farmers locally who would like to do that sort of thing can pick up on that and begin to do that sort of thing. So a lot of that kind of thing which is going on, like everybody else on the bandwagon with the internet. I don't know if you have visited our Farmers Markets homepage. I recommend it to you if you haven't but in caveat it's still a work in progress but based on information that we have about where farmers markets are located around the country, those of you who have been into it will know for example, a map of the US will pop up, you can click onto a state to get a list of farmers markets that exist. We're trying to take advantage of technology, no not everybody is hooked up but we have a pleasantly home page devoted to farmers markets. We expect that that will be really expanding over the next year or two to cover direct marketing more generally. Those of you who know something about us will know that we have promoted and funded a lot of direct marketing kinds of activities. We have helped develop farmers markets as I've said and a lot of the reports and so forth have come through the various projects we've been involved with will all be going up on the home page. Hopefully they'll be instructive to others around the country, give them some ideas of what it takes to put something like a farmers market in place, and there will be some benefit generated from that.

We're also convinced that we don't know nearly enough. I always figure that that's the first step toward learning something is figuring out what you don't know and we figure we're right in there on terms of things we don't know. And have really engaged in the process now of trying to reach out and ask folks what it is that really their problems are. We have a group in tomorrow, for example, seeking advice from them on what we really are to do on farmers markets. Farmers market managers from around the country, others who are involved in farmers markets and the basic idea is the spend the day talking about what we can do. We're looking at things, for example, would there be any value of us putting together some type of farmers market managers certification program. Educate folks on what it takes to run a farmers market. Other kinds of things of that sort but the average thing to us is very important. As I say, what we're convinced of is that we don't know nearly enough about what the problems are and what the issues are and we're convinced that the only way we're going to find that out is to go out and talk to people and try to learn about that. We also hope that we will become something of a one stop shopping shop in government really with basically the library, if you will, of information on federal programs that relate to direct marketing. I think sometimes we think a bit narrowly about that but in fact if you look around government and Housing and Urban Development there may be programs in Health and Human Services. There are programs in the Small Business Administration. There are lots of programs around which in some ways which have indirect bearing on this but also could be important components to help somebody kind of get over the top in terms of putting in particular farmers markets together but also to get into some of these other direct marketing activities. We anticipate having an 800 number, an expanded home page, as I say a kind of ready reference library on the shelf. We may not be experts on all those things, in fact, I'm sure we won't be but what I'm hoping is we'll know enough about those other programs that we can steer people in the right direction so firstly we can make them aware of programs that may not be aware of and secondly, we can save them the 25 or 30 phone calls that they would otherwise have to make if they were trying to find the information. So we're going to try to do some things in that arena as well.

We do as I say have involvement around the country in a variety of projects and what I thought I'd do is click off a few of them for you to kind of give a flavor for the kind of things that we've tried to support. These are really over the last year or two. We've for example have supported a project in the midwest that's really targeted to small shippers to really help them sort out what they can do internationally. What sorts of niche or other markets might exist internationally that small shippers might look to take advantage of. Included in that accessing the feasibility of a regional small shippers association so you get some of that critical mass really that Farmers Union has been fighting a battle over these many years and I think we've actually made some notable success.

We've been doing a lot of work in the southeast and it should come a surprise to nobody that as commodity programs change some of the traditional corps which are produced in the south, tobacco, for example may be in for hard times. It's really important because as you well know an awful lot of tobacco farmers, if not most tobacco farmers, tend to be small farmers, tend to be farming very limited acreage. What are they going to do? We have funded several project in the southeastern states, trying to help folks in that region sort through their alternatives. What sorts of alternative crops might want to consider? We've had projects in Kentucky, in Tennessee, in southwest Virginia, were basically trying to help folks figure out what their next step might be.

We've also done as many as you are aware, a lot of work on organic. I have the responsibility for the organic rule, the organic standards. I've actually ended up with a thick skin over the last few months and it will probably get thicker before I'm done. I think the good news there is we're going to get that on track and I hope that you have followed some of our press releases. The Big 3 are off the board now. We will not be including Biotech for the radiation or municipal bio cell. What do they call that stuff? Sludge - I don't know what they call that stuff. And getting that stuff off the table I think we're back now focused on how do we actually put a standard together or set of standards together that meet both organic producer and consumer expectations I think you'll see that come together. But we've also in addition to having that responsibility we also have worked on projects around the country related toward Hanek and I though it would be just as genuine so I didn't mention my connection to the standards before I mentioned the projects. I'm a nice guy but you know but we have. We've worked with organic groups around the country trying to help them get started and get them to help us really in many ways.

We've done a variety of other activities. We've worked with small farm groups and a number of states on simple little things like directories of producers in a states, small producers - we've done a lot of that in the northeast. One for example here's a case and point, I don't know if we've done midwest, I think we have but there is a lot of simple things that one can do because I think and I'll close with this the really interesting thing to me is that if small farmers are going to succeed - I think the point has already been made this morning and the slide which is still up on the screen I think further makes it that farmers have got to become marketers. That connection between producer and consumer has to be a real one and in a way it doesn't matter whether it is a big farmer or small farmer. Really I think that is becoming a truism across the board. It is not simply enough to know how to produce a product. Also you have to know how to market that product and I think the good news in all of this really is that small producers actually do have some advantages. There is the ability to be flexibility. There is the ability to shift gears really quite rapidly to pick up on the consumer niche that shows ups. Big outfits can't do that. I mean they're programmed for the next three years so there can be no deviation. Smaller producers have opportunities and I think that ought not to be lost but it also means that there is kind of a commensurate for those small producers that they've got to become very astute marketers. In many cases those small producer can do it on their own, they can find a niche whether it be farmers markets, I've seen a lot of little value weighted products - maple sugar candies. I mean there are all kinds of things for which they are markets which individuals can address and be successful with, I think. But in some cases you do need critical masses and I think a lot of what has already been said here this afternoon in terms of producers coming together going through cooperatives or be it through other means could be faith based organizations, community based organizations - there are lots of ways for producers to get together. Those need to be looked at pretty carefully too because the reality is that there is going to be some marketers where if advantage is going to be taken of them there's got to be a critical master product. There may be some need for processing which would involve capital investment which is beyond the capabilities of an individual producer. But all those things are also doable.

The last time I met with Mr. Clayton he said to me his wife had told him they need to get involved in this CSA. My question is have you found a CSA to be involved with? The next time we meet I would like to discuss this again. I felt that was real real positive that he knew what a CSA was to start with. Community supported agriculture is basically is an arrangement where a consumer in essence can contract with a local farmer to have produce, in particular I think is the typical example that can be elaborated but that would be the typical example so you can kind of contract for the season to have your tomatoes supplied. In defense of myself why we have not yet found a community supported organization or agricultural that we could get involved with, my wife was at the farmers market this morning - I know that for a fact - and we are almost exclusively organic, we're trying.

I'm sorry that we did not clarify CSA. It is a way of getting farmers cash up front. It ensures the consumer food that he wants but the benefit from the perspective of the farmer is that you get paid ahead of time and your risk is taken up by the consumer because in most of them that I'm familiar with you do contracts for a period of months and you would pay a season and you would pay up front regardless of whether or not the farmer actually produces in terms weather, tragedies, or something like that. So the risk then of whether tragedies or other tragedies is shifted from the farmer onto the consumer or onto the community. It's shared. It's also about communities getting connected to their farmers and that's a critical piece and I work a the Vermont Department of Agriculture and we've had tremendous growth in CSA development and direct market development and it's an incredible opportunity. We're rural but we think it's much more than just the economic exchange but we have to have our farmers connected to our community and our community must be connected back to our farmer. So they come out to the farm and they pick up the shares. Most have ag education courses so the kids are learning while their parents are picking it up and there is an exchange in the connection and I think that that is a critical piece too.

Okay lets go back to our questions.

Jakey Lloyd, New Zealand Dairy Board: I heard lots of good things today but I have a few questions on the ongoing viable issues. What we've talked about or heard about is physical integration and I think that it's absolutely critical and that's cow to customer in my case which is dairy. We've also talked about the global market place and that is an absolute reality now and the other thing that we didn't really talk about but I think is essential is brands and we say is coming through here. What we're talking about here is branding. Brand your product. It is absolutely critical to do this to differentiate yourself from the market place. In New Zealand all the dairy farmers collectively market as one company through a cooperative of eleven cooperative companies owned by the dairy farmers. Now this has been very successful over time because it is made it profitable, sustainable agricultural industry in our country. The biggest barrier to success is protectionism from other countries because for example, we cannot bring in our consumer products into North America because the tariffs are too high. This is perhaps a personal question rather than from the companies perspective - the USDA talks about the shifting of the types of programs and support that you've had to now the new programs well I guess I would question why do we have programs at all and I know there is lots of answers to this and lots of realities but in doing that sometimes we do get different in distorted market signals and I think that we are in a stage of evolution of our communities, of our lifestyles and it would be interesting to see what happens in the future. But just perhaps to give you confidence there are models out there of sustainable profitable unsupported industries by government that can operate in the global market place.

Thanks should I give you a chance to respond to that? Yeah.

I'll be brief because there is a 50 to 60 year history as to why we have programs I think. Probably the more relevant question is in fact where are we going? And I think DOS is largely on board with the position that New Zealand takes and we certainly have been a participant in the trade rounds and our objectives are quite similar to New Zealand's. We may differ a bit on pace and some of those kinds of things but I think the end points are probably similar. I think probably one of the implications though of this whole line of discussion is as one moves to a world where you really don't have government intervention or any significant government intervention where does that leave farmers? Because you can argue about the benefits and the cost of the kinds of farm programs that we historically have had and others around the world have had and certainly they have had their own set of ramifications in terms of the kinds of structure they ended up promoting within our own economy and that kind of thing but still to some extent there were certain protections there and they go away. The question then is what comes in their place. Certainly the kind of thing I think that we've been talking about up here plays some role in that. I think as Trish was saying, using her example with the North Dakota Pasta Growers I think actually that they are on the same page as your dairy guys. I mean the deal here is basically you got an organization that's owned by farmers. They're looking to ensure that they get their share of the value added. They're developing a branded product and fundamentally positioning themselves to compete in the marketplace where there whether it be domestic or global. So I think the kind of model you lay out in fact one can cite examples within the US as well but I think it's also probably fair to say that that kind of model isn't going to address all situations and I think the larger question at issue is in addition to those things are there other things which need to be contemplated or are there other approaches that farmers need to take and can take and can take advantage of and I guess I would view it in that context. Certainly the kind of thing that you argue for makes sense and a great many cases and we have our own real world example here today but there are probably other things as well also the kind of thing we talked about up here.

Thanks.

My name is Kelly Ladeer and I'm from Alaska and I'm a new president of a new cooperative. I've spoken with you on the phone I think Teresa. How do you do? This is sounds like maybe a simple question but if you could give a little bit of time I think maybe you could help us. Most particularly I know you can Teresa but this is for Mr. Clayton. We are a red meat producing cooperative primarily at this point although there are Alaskan producers of vegetables and some small fruits. I know that you are aware that there are a number of federal remote cites in Alaska. In the freshest stores, the big stores in the big cities, meat for example is 17 days older that comes from outside and is in meat case than what Alaskan producers can provide. And it's true of the other vegetables as well. My question is is there something or are there some minor details that your division might know about that could assist our cooperatives and more generally all Alaskan producers who are at a minimum 1500 miles from the rest of the United States to supply some of those necessary foods to those remote sites?

You may have to help me with your question a little bit. I will take a crack at interpreting it and then you can correct me as I go along. If I take what you're asking correctly is it a matter of you've got Alaska, which is a long way from a lot of places and you've got food products being shipped in from far away and you've got the potential for locally produced product which could in fact be utilized locally. The question is then how do you sort of break into your own market place.

Well I know it's possible to contract for some of that but you're for example talking about having farmers markets on federal land - well somewhere in between those contracts that I'm already familiar with and the farmer markets that you're arranging to have on federal land is a meeting ground to supply those remote sites and I frankly don't know enough about it to know how to supply those federal agencies that are way out from any town in Alaska.

You've got a lot of remote sites out and around Alaska and the question is how to get product to them. I'm not sure if I know the answer to that one just standing up here. I had thought perhaps to direction we were going was how do you develop arguably more of an identify for Alaskan produced product within Alaska. If that were the question certainly there are things that we have been involved with. We have actually worked with a number of states, Jersey Fresh and a lot of states have state logos they use to promote sort of the indigenous product. It is conceivable that we can work with you on that to help it be further developed and that kind of thing. In one project that I didn't mention that we're beginning to work on, and I'll sort of use this as an opportunity if I can just to mention, we've begun a couple of projects in the States of Georgia and Florida looking to see if we can link up local schools with local producers and particular if we can link up local schools with minority farmers or certainly limited resource farmers. That's the way fledgling efforts and suspect that in the first couple of three years it will primarily consists of lessons learned. You know probably things not to do as much as things to do to try to make that happen but as some of you may know we have a national school lunch program in this country and the Federal government donates commodities and they've gotten a lot better over the years. I'll just offer that editorial. But the Federal government only provides like 16 or 17% of the food that goes on a child's plate. The remaining 83, 84% is purchased locally. It's either going to be purchased through a wholesaler or some other way and it's our view that in many cases at least, there are going to be local opportunities where schools and farmers can hook up. It's a real interesting process. Schools want to buy from institutional sellers and the products are going to show up precisely when they want it and in the form that they want it. That puts a burden on the growers certainly. So there are lots of things that I think that we're going to learn. I was trying to whether to use back to your original question and you know is there something in here you know that we can think about that kind of like my school example that we can look for some ways that we can link up federal sites with sort of indigenous production or producers in Alaska and I would be happy to visit more with you about that to see if there is something that we can come up with.

Thank you very much. Who would I talk to about that?

Well, I guess I'm it actually. I would be happy to visit with you more about that if you like. We can talk about organics to if you want to.

I'm Pam Felian and I'm from Northern Maine and I'm the first official woman farmer in Rustic country although they've farmed from hundreds of years. I took the responsibilities for the bills so USDA said I was socially disadvantaged. I have a 130 acres. It's a little bitty farm and marketing of course is always the issues for all of us. I mean many of us know how to grow things but how do you get money from that. I have gone to the country jail and asked the jail administrator is he received money from the Feds. Don't you know that I'm a woman and I have a signed contract now for them to buy my vegetables. And we went to the hospitals and asked the dieticians if they'd like to buy local and they said no, we buy from the local wholesaler. The one who supplies everybody in our community and I said well, "Why do you want to feed poison food to sick people." So I have a meeting with her and our school system will be starting up in August so my plan is to take a basket of fresh produce into the school administrator and say that this is what I can give you locally, by the way I'm local, I'm USDA funded and I'm a woman and you're using federal dollars. I think you have to remind people of that constantly that they're using government money and you're a minority.

Thank you that is the kind of testimonial I like to hear. I think that's good. That's exactly the kind of thing we're trying to promote.

Some of you may be sick of seeing me because I've done this just about every marketing seminar. I'm Claire Klotts. I actually work in wholesale alternative markets so I know a lot of what you're talking about and I can assure you that the things he's talking about are happening. On my level I need to know what's working and what's not working and in that regard there is a lot of you that are associated with organizations that have done little brochures on how to do direct marketing or how to sell to your local school and I've met these people and I know ya'll are here. I need to get copies of these brochures. I need to know what's being out there published because it's a very gray area and I can contact all the cooperative extension people I want and they have what's done out of the universities but some of the very interesting things that have been done with your local organizations or associations. Take my card please. Send me those things. I would love to include them in some of the things that we're looking at but we need to get this information from you so as much as we can give back to you we also need your contribution. So please take my card when this is over. Thanks.

I didn't put Claire up to that actually.

I'm Captain Clearly. I'm a dairy farmer from New South Wales in Australia and I'll supply to a cooperative which is terrific and I'm happy with it and the markets well. Markets brands, dairy farmers brands you know but it need to raise more capital and it is proposing to open his non supply share of public float of shares. And I'm concerned then that shareholders needs will become more important than suppliers needs and I'm wondering what alternatives there are in cooperatives in the US and other countries. I'm interested to hear what other people have as suggestions.

In the US our Federal Tax Code actually regulates the number of non producer members that there can be in a cooperative and so this is an area where tax law structure is set up to encourage and actually enforce that our cooperatives will be producer owned and producer controlled. So that's one avenue. I don't know if you have similar types of legislation or not in Australia but you may want to think about agitating to have some legislation that will be like that. The other thing is that there is limitations. You can have different types of shares and so you can have it so your investors that are not producers won't have voting rights. This way you ensure the control and management decisions remain in the hands of the producers. So those are two things that I think are significant aspects of American law that could be helpful.

Does anybody else have any comment on that? Other questions.

We're looking to set up a public market in Burlington and one area were thinking about (again direct market outlet is critical) is looking at maybe setting up as a cooperative and I didn't know if that was anywhere we could get any assistance. I was actually at USDA today trying to see if I could fish any kind of money out and we've gotten great assistance from Claire and her office and it's been a great project to go through but I didn't know if you had any experience because we feel even with this direct market outlet we still as producers have to control it because that can change. Also common in farmers markets and what they need. They need to have like a market manager help pay. They need a sign. They need a couple hundred dollars. They don't need a lot of manuals. They just need little things to help them out to get over the hump. I think that that is critical and finally I work with the organic producers in Vermont and it's been a tremendous growth industry for us and I'm just very concerned with the language that came out in that original draft from USDA and those three hot buttons and I have to say this and I know its hard but it should have never even came up. This is about trust and I work for the state government and I work hard to maintain a trusting relationship with the agricultural community in our stat and USDA has to do that also. When you brought those three things up it just make it feel like there was no trust and I know you're going to come back but once you start that dialogue and we're off on that angle it's really going to be hard to get back where we can feel like we're going to be at the table. I just have to say that. It's really hard to say it but I just have to.

I can see where you got your thick skin. On the coop issue though USDA has wonderful cooperative services. They have very good actually Rural Cooperatives is the magazine they put out and people who are really willing to help you and I can give you some names of people that I've worked with and you can also call me. Our organization does a lot of coop assistance for farmers so either way.

We're right at five and I want to get a few words in here real quick. There are some publications on the table right here. Please feel free to pick them up. The other thing is a little plug for the National Catholic. We're alive tonight at 7:00 in the blue room. We will be doing a workshop. Kind of a caucus on the Vatican's reform piece and the USDA Small Farm Commissions A Time to Act. We're going to look at those two documents and how similar they are. It's really surprising and you don't have to be catholic to come to this. The other piece is I've got a question about the labeling in the organic standards. I was really really concerned about that piece of it. To me that was something that went way beyond organics and is really effecting all producers and I would like to know kind of where that piece of it is.

Well with everything else, that's being worked on. To some extent there was sort of confusion over that. You know from our point of view we had to define a label where we could carve the turf out and people couldn't infringe on it. I think when it ended up happening in translation was that it became interpreted as more encompassing that probably what we intended it to be. But the trick is how do you carve it out in the way that you can define it. You can defend it. You can make sure that whatever is labeled organic is clearly understood. There will be no confusion about the label and I think that one is just another one that is going to be worked on. Message was received and some of you know we did hearings around the country on organics as well. I did a couple of those and I had Green Peace and all those good folks demonstrating in their suits and what knots so message has been received and hopefully the fact that we've moved so quickly to get the Big 3 off the table is a little bit of a step at least to suggest we're serious.

Well unless there is any final quick question.

How do we find you on the homepage?

The contact information will be on the table here for anybody who wants its.

Other quick questions?

My name is Denise Hoffman and my husband I have a my husband and I have a diversified farming operation in southeastern Kentucky in a very poor county. The main component of our farming operation and the only component in most of the farming operation is tobacco. Can you elaborate on some of the things. You said the USDA is trying to do some things. I haven't heard about any of these things. Can you tell me a little bit more about them.

A lot of that work is still in process so I can't be as definitive as you and I would like me to be but there are some projects and certainly there is work going on looking at possible substitute crops for example. Other fruits and vegetables and whatever which could be produced in place of tobacco if that were the decision that could be made. We've also funded a project looks at and I don't know what quite the right jargon is for it but the notion of kind of marrying up tourism with small farm agriculture and trying to sort of get the state tourism departments in essence to try to promote your part of the state which then arguably could create - Lord knows maybe it could knock out a walls and make a bread and breakfast. I don't know if that's possible or not but certainly beyond that possibilities for roadside markets and other kinds of things. The work is still kind of early on and obviously it's a huge question. Probably one size will not fit all. Not one solution for everybody. We're realistic about that but we're hoping that we can kind of peck away at it and find some things that will begin to help.

Regarding the tobacco coop I can put you in touch with somebody at the coop whose working on this issue. She's a wonderful woman and can give you some help. She couldn't come.

Well if there anything else?

I have one question for you. I'm from West Africa and I listened to what you said and I noticed that everything is US and that is good but I would like you to elaborate a little bit on the concept of farmers market because I'm the head of a marketing foundation which is supported by USAID and we have a program of linking farmers with local hotels but the farmers market I don't understand.

There are probably a lot of examples of farmers markets and they vary in a lot of ways but fundamentally it's basically where a situation where farmers can bring their product to some identified location that local consumers are aware of and then consumers can come and buy that product directly from the farmer. In some cases it may involve creating a structure or building. In other cases it may be on a parking lot. Church parking lots are certainly one example. Municipal parking lots would be another, for example. So the degree of formality with it will vary and I don't think that that is so much the issue but the issue is sort of a known or identified location that people know that you're there everyday of the week or you're there every Tuesday or Thursday of the week that farmers will show up with product that they're offering to consumers. Consumers are aware of that and they show up and buy that product from the farmers.

Let me apologize because I was going to explain what each of those different things were - the farmers markets, the CSA's are community supported agriculture, subscription marketing and some of those different kinds of marketing options are and I apologize for not explaining that to you.

Other questions? Thank you all for coming. It's really been a wonder pleasure to have you. Thanks.