We do have some time available for our committee to ask questions of the panelists. I'd like to open that up if there are questions.

USDA DEPUTY SECRETARY ROMINGER: A couple of you mentioned biotechnology. I'm wondering if you have any advice for us or for your fellow members in agriculture given the way that things are going in the European Union, how we make some headway with them? The EU Environmental Commissioners just voted to put a complete stop to any approvals of any new GMO products. Do you have any advice for us?

CO-MODERATOR LYONS: If I could, too, please, when you get back on the microphone introduce yourself again, so we know who responded to the question.

Thank you.

MR. GORDON: Don Gordon, Agricultural Council. I wish I did have advice for you, Mr. Rominger. That's a tough issue. In fact, the last issue of the Economist, that was its front-page article. And we're in a serious situation, from what I gather, a serious movement in Europe right now. I think we're lucky that it's not happening in the United States, but who knows.

I think that we as industry have an obligation to perhaps do what we can do maybe through the university or some other avenue to start educating people about the importance of biotechnology and come up with the sound scientific reasons that you need to help you make the argument and make your case with trade representatives.

MS. LANINI: Sharan Lanini from American Agri-Women. I would stress that we be sensitive to the different members of the EU that are reacting to this on a very emotional basis unfortunately, but try to, through sound science, get the benefits of biotech to the consumer level, so that they understand the true benefits and the potential of this technology.

USDA DEPUTY SECRETARY ROMINGER: Thank you.

ASSISTANT U.S. TRADE REPRESENTATIVE MURPHY: I'd just like to follow up on the biotech question. I think, Mr. Gordon, you had indicated in your statement an opposition to labeling of biotech products. And my question here is in regards to the European Union, where, as you know, they have a regulation in place mandating labeling. It's an incomplete statute with regulations yet to come.

But the real question here is that given the seeming demand of European consumers for labeling, opposition to that and resistance to it, at least, some people believe makes the situation worse in terms of overcoming this reluctance in the European consumer to accept the technology. So I just want to see, in light of that, if you have a different view or in spite of that you will still oppose labeling of bioengineering firms?

MR. GORDON: Well, I think it still goes back to the science. As I understand, they don't have a solid scientific basis for asking for the labeling. I mean if good science dictates that these products must be labeled, then we don't have a case possibly. On the other hand, I think the science will be there to prove that these products are indeed safe for the consumers. And that's the job that we all have a responsibility to make sure happens.

ASSISTANT U.S. TRADE REPRESENTATIVE MURPHY: Thank you.

AMBASSADOR BAAS: Since everyone seems to be asking a biotech question, let me ask one too. One thing that people mention as a possible resolution to the problem is segregation of non-GMO products and GMO products. And obviously that has lots of implications for costs for how one ships. And we've heard a lot about this in previous sessions from basically bulk commodity producers. Not surprisingly, they see some problems with it.

I'd be interested to hear how this might work in California products. Is segregation a possibility, a logical possibility, if, in fact, you know, for example you can produce GMO products for the domestic market and non-GMO products for the European market? Is that possible?

MR. HEMPEL: Good luck.

MR. GORDON: I'm just hazarding a guess. At this point, I would say no. Again, I'm looking at the future. As I said in my statement, just given the population growth we're going to have in the central valley, and the need for producers to cut back on their use of land, cut back on their use of pesticides, cut back on their use of water, and all the environmental regulations, innovation is going to be critical. And to the extent that's going to affect or have an effect on food at the end of the chain that's on the retail shelf, I don't know how you separate it out.

But I think, at least in California, with the exception of maybe just a very few commodities, the impact of what is out there in the future hasn't quite taken hold yet. But we're going to get there because we have no other choice.

MR. PAULI: Bill Pauli. When you reflect on the worldwide economy that we have today, and the fact that so many of our processor/producer/suppliers are really worldwide processor/producers, whether you're talking about processed

vegetables or fruits or non-processed vegetables, I mean where would you stop between whether they come from Mexico or Canada or the United States blended with other products and other components.

I mean it simply becomes a quagmire that I don't think anyone can effectively deal with and continue to provide a reliable supply of food at a very low cost on a year round basis. At some point, somebody is going to have to deal with the cost side of the equation. I mean we can label anything. It's just a question of who's going to pay and ultimately the consumer will pay. And I think that's where it's going to really meet the road.

ACTING CO-MODERATOR VILLARREAL: Any further questions?

AMBASSADOR BAAS: Can I have one other question, and I think it's for Mr. Pauli. You mentioned an equitable dispute settlement dispute procedure for perishables and we've heard about that in some other listening sessions as well. And I would welcome any suggestions that you or any other panel member has as to what that might look like. I mean would you have -- it seems to me if it's a perishable, you'd have to have something that kicked in fairly quickly or it would be too late. I mean even two weeks could be too late I suppose. So what sort of ideas, if any, do you have? Or if you don't have some now, could you provide some later?

MR. PAULI: We'd be happy to provide some. You know, as you know, it's really a complex issue based on which kind of product, you know, where some will have longer shelf life, more adaptability to storage than others. That complicates it as well. We're happy to respond in writing to that.

AMBASSADOR BAAS: Thank you.

ACTING CO-MODERATOR VILLARREAL: Yes.

USDA ASSISTANT DEPUTY ADMINISTRATOR GARAMENDI: My question is to Mr. Hempel. You talked about the subsidies, that $2 billion subsidy that you used, providing for fruits and vegetables. That makes me very concerned about our farmers. How do they implement that? I mean, how are they --

MR. HEMPEL: I'm not sure I can answer that question specifically how they get the money to the growers. But we can provide you with an answer to that.

USDA ASSISTANT DEPUTY ADMINISTRATOR GARAMENDI: Thank you.