SECRETARY GLICKMAN: I don't think those words were particularly sharp, and I think they were useful. Let me just mention a couple things. I said at the beginning that trade is not the only leg of the farm safety net. I think the 1996 Farm Bill was built on that premise, and what we have seen is the world changes very quickly for a lot of different reasons, currency exchanges, recessions, and for us to put all of our eggs in the trade basket is a serious mistake.

Now, Congress, when they passed the 1996 Farm Bill, it was done at a time when things were good, looking better all the time. There were weather problems in the world that created crop shortfalls. But we have now seen that that de-regulatory effort has some down sides to it, and I believe that Congress and the Administration working together will provide short-term help, certainly this year as it was done last year.

Saying that, however, I think that there are some further structural things that need to be done. For example, all authorities were removed from the Secretary (inaudible) in the 1996 Farm Bill to lend money for farm storage. Farmer-owned reserves was removed. Extending commodity loans was removed. That bill capped commodity loans, as you know, and of course it removed all set-aside authority from the office of the Secretary.

Now, I'm not saying that every one of those things was necessarily perfect, but that bill was based on the fact that we would remove the government from agriculture from a direct way and we would rely on the markets. And I would have to say, Mr. Phillips, that the truth of the matter is that the government has tried to sell farm commodities. We've used GSM farm credits the highest ever in the last several years and in terms of opening markets, but at times it's not enough. We've had three years of world record production everywhere in the world: Argentina, Australia. You know, you can only force-feed so much product into the world. And we've also had weakened demand as well because of economics. I think that is changing. Demand will come up. But you've got to have a farm program that addresses both the top side and the bottom side. And the '96 Farm Bill addressed only the top side. I think it needs to be changed. But in the process, I think that we do need some short-term relief, and I think that's important to recognize, that while these are trade sessions dealing with trade issues, that we need a domestic components of our farm policy as well as a trade component of our farm policy. You can't put all your eggs in either basket. It won't work. And we do our best, and we have to recognize that the world is a globalized place, so products will flow fairly freely between countries, but at times it's not going to work out to our economic benefit, and that's where you need some countercyclical nature of farm policy to protect people when those kind of things happen. If you believe farming is an occupation worth preserving, which we do and I assume everybody in this place does as well, and so I think that -- I agree with your point there, and I think that we have to work diligently both this summer and in the next year or so to try to develop some long-term structural things to try to help the production of agriculture.

I'll just make a couple of points on this. I think we're going to have to spend much more on agriculture than we spent in the past, you know. Now, we criticize the European agriculture policy because a lot of it is trade-distorting, and we have to remove the trade distortions. We've got to be careful. We don't want to go and place ourselves on the out entirely and end up with not being able to do anything to help our domestic farmers in the process. That's an important policy thing that we in the Administration and Congress have to also work on as well and to recognize it cannot be pure. It will not work if it's pure. And so I think you raise an important point there.

On the issue of sanctions. I think it is worthwhile pointing out that most sanctions have been removed. It's estimated that all of the sanctions that are out there now count for 1 percent of agriculture sales. Sanction gets a bad name and generally speaking, I agree with what Hubert Humphrey says. You should sell anything to any country that they can't shoot back at you. Okay. I think that's true. But the fact of the matter is the sanctions that remain on the countries, and the President has announced that he wants to repeal those sanctions in Iran. There were a few other countries that were mentioned that we ought to do that. But we also shouldn't make people believe that sanctions are the reason you can't sell agricultural products overseas. It's not. There are a lot other factors there beyond sanctions.

The final point I want to make has to do about biotech, and I appreciate, Mr. Brown, your comments on that. I'm going to speak to this issue tomorrow at the National Press Club. I think biotech is very important, and science will move forward no matter what. But in the process we have to assure that farmers are given proprietary rights in the work products so that they don't become services in a fuel system where they don't have any ownership rights. That's a very important thing, and we must work through this whole biotech area because we are going to be producing more products directly for the customers as you talked about, Mr. Schrock. And we have to make sure that producers have some ownership rights in that process; otherwise, we will have a much smaller and potentially victimized agriculture if we don't deal with this in a very effective way. And I make that point because there are some in this world that don't want to see science move forward, and it will. There's nothing we can do to stop it. What we have to do is make sure that it's regulated fairly, that the products are not put on the market if there's any question if they're safe or not, which we do very well in this country, and we assure our farmers' rights in this process as well. So I just wanted to make that comment.

MR. SAUNDERS: I would just like to make a comment partly based on the last panel and also this one and point out a couple of thoughts here that I had. We're here today in large part because of the greatest success story in the history of the world, and that's U.S. agriculture and this food producing system, and we've simply overdone it, and we're here as a result of our success. And that success has been because of a lot of things, but it's been because we've had diversity in our agriculture, we've had the large, we've had the small, and everything in between. And I think that diversity is our strength, and I'm hearing some bashing, nashing of teeth here as we've heard this spring in our state and all around the country. And one of the terms that we hear -- and I'm one of them, you know, I'm a farmer too. I've still got corn and soybeans stored in the bin at home on the farm, and I sold some feed to Kansas Spring at less than the cost of the production, so I'm feeling the frustration too. But we keep using and hearing that "independent". Independent farmer, and we tend to pit the independent versus the corporate, and I think we've tried hard in Missouri, thanks to the help of a professor of agriculture, to coin the term "interdependent". And I think that's what we're seeing here in agriculture told today. And we've got an example of it up here in about four of the six people on this panel are interdependent farmers.

Folks, we can't be totally independent anymore. No matter how you slice it, we're all dependent on someone, whether it's the government or whether it's the corporates or whomever it is. And I think we need to get away from that term and try not to pit ourselves against one another. And I think the challenge for both ends of the spectrum, the challenge to Mr. Brown here as a representative of Monsanto Company is to try to focus on some of the needs of the so-called interdependent farmers because they need them. They need their producers. They've got to sell their seed somewhere, and we're going to hear from some large cooperatives here today, and I've heard them being bashed, and so I just think the challenge is to think of how you can assist in keeping some of these farmers out there, your customers.

On the other side, I think we as so-called independents have to realize we need the other guys too. They've got some products. Let's face it. 51 percent of the soybeans grown in this country maybe this year are a result of the product developed through these large companies that we can't develop ourselves. So we need them. We need each other. If we don't try to work together and come to some agreement and focus on some things that we can agree on, we're going to be sending a mixed message to our customers. We heard a lot of talk today about customers, giving the customers what they want. We've got domestic customers here right in this city. We've got foreign customers right now that are getting a mixed message out of agriculture because we're beating up on ourselves. So I guess I would just offer that. Let's try to work together and not beat each other up and try to focus on some things we can agree on and move forward in this, and I think there's examples here. We've already heard from the examples the way we can do that. Thank you.

AMBASSADOR SCHER: I want to respond to the -- the presentations were all excellent. I would like to respond to two of the points, one that Kyle raised on this whole issue of Early Harvest on the next round, and I think that is important. One of the concerns we have going into this round is exactly what so many people here have said. We can't afford another seven or eight or nine years that it took to finish the Uruguay Round. Uruguay took eight years to finish, and the fact is farmers cannot afford to wait eight years to get relief. What we have reached as an agreement with many countries is to make this a three-year round.

Now, the Europeans have said they want this to be what they call comprehensive, a single undertaking, meaning that nothing is done until everything is done. In some ways that's attractive, but in other ways it may not be. I mean, we saw in the China agreement with agriculture we've actually accomplished a lot, but because everything is not done, we can't implement any of those decisions. So the question I think agriculture faces is what is the leverage? The fact is, as you said, we've opened up our market in agriculture. We don't have any more to give, frankly. So how do we structure a negotiation to include things like services and industrial products. So we say to Europe, you want us to open our market more in industrial products or in services areas, then you have to give on agriculture. So we need to be a little careful in buying into this notion of a single undertaking which may say to agriculture, even if we complete our work in the agriculture area, we have to wait until we work out transparency rules for the WTO, issues on dumping. A lot of issues which are very important which frankly will take years to finish.

So I think what we have to look at is how do we structure the negotiations in a way that maximizes the leverage for agriculture, and that's what our focus is. Now, that may mean that there are no Early Harvests, but it also may mean with certain sectors, for example the APAC section, the oilseed section which we negotiated in APAC, zero to zero oilseed. I don't want to be in a position to say listen, if we haven't finished everything in the WTO round, we can't get an agreement on the oilseed sector. Because there are areas in agriculture that can be very beneficial.

So again, I think if the fear is we're going to give away the leverage, we're not giving away the leverage, and I think everyone understands that. Secretary Glickman has made that clear. The President has made that clear. The Vice President has made that clear. Agriculture is in the center of this negotiation.

The second point I wanted to make is, I think it's interesting it came up on the GMO issue, it came up on the earlier panel on the issue of hormones, and that is the issues of customers. I think this is a very important point for me as a negotiator and for all of us to think in these terms. And one of the earlier panelists said we shouldn't be posing sanctions against the European Union because they don't want to buy our beef. And we shouldn't be enforcing our trade laws because they don't want to buy our GMO products. And I think the issue here is who decides? The issue for us is not whether or not the Europeans want to buy our beef, but whether or not we have the opportunity, the right to try to sell it to them. If they don't want to buy it, they don't have to buy it. But do we want governments, do we want the European government saying that they as a government will decide what consumers will want or not want. Think about that. Do we want the U.S. Government to decide what consumers should have the opportunity to buy or not buy. And so the issue in the beef question, the issue in the GMO question is not whether or not we're trying to force-feed these products to consumers, but whether or not our producers have the right to try to market these products to consumers in Europe. We believe that under the rules of the WTO and under the rules of the trading system, we should at least have the right to market these products, and if European consumers don't want to buy them, then that's their choice. But let's not put ourselves in a position in which the European government is given a veto over what consumers have the access to. And I think that is the fundamental issue for us as we approach these issues.