we don't rule out any role for any particular country. but obviously the p-5 plus one is in the core group. and we expect next month's to revolve around the same group. >> how much do you think the -- on the other hand turkey's tried to increase its trade with iran and has a goal of triple trade within the next five years. on the other hand, the u.s. government is trying to isolate iran. how do you think the allies are working -- >> well, those are not contradiction. turkey is a neighbor of iran. it does have an economic relationship with iran, and in fact, there are categories where trade between countries and iran

are fully authorized. there are special categories by resolution 1929 that are prohibited. and turkey has clearly indicated publicly that it will abide by it's international obligations. thank you. :

president obama talked earlier about the s.t.a.r.t. treaty with russia and tax cuts.

he spoke reporters following the meeting with the president of poland. >> before i mention the substance of our meeting let me say something very quickly that it's on everybody's mind and that is the current debate about the tax we have come up with. [inaudible] >> we announced this agreement and over the last couple of days but congress has looked of what would be the result of getting this agreement and i think it's worth noting the majority said

upwardly revised forecast for economic growth, and noted that in the conflict of disagreement we expect more of growth in 2011 and 2012 than they originally anticipated. it's important for congress to examine the agreement, look at the facts, have a thorough debate, but get this done. the american people are watching and action on our part. i don't think you need to translate that. now, having said that, i just want to mention i first in the wake of a tragedy that not only broke the heart of the polish people but the entire world to grieve.

>> [speaking in native tongue] >> the loss of president kaczynski, the first lady, the entire planeload of extraordinary polish leaders caused extraordinary shock. but i have been so impressed with the steady hand and the leadership that president komorowski has shown as he stepped in to guide the polish people forward. >> [speaking in native tongue]

the polish people and the american people long share not only a love of freedom, but also deep faith and resilience in the face of hardship and president komorowski exhibit it all those streets as the leader of poland during this difficult period. >> [speaking in native tongue]

>> so given the strong bond between our two people -- bonds that i feel very personally given that i am from chicago which has the largest polish population outside of poland -- this has been a very productive meeting and we have discussed a wide range of issues. [speaking in native tongue] >> we started with the issue that is at the heart of our relationship, and that is our status as allies in nato. and coming out of lisbon summit,

we once again reaffirmed the central the of article 5 as the central tenet of the nato alliance. and i reiterated my determination and the american people's determination to always stand by poland in its defense and its security needs. and that commitment is exemplified by the joint adoption at lisbon by nato and of nato-wide missile defense capacity. it's exemplified by the air force detachment that will be placed in poland as part of our ongoing relationship and the retraining process. it is indicated by sm-3s, the

interceptors that are going to be located in poland as a part of our phased adopted the approach to missile defense. and most importantly, it's reaffirmed by the fact that not only are we to nato allies, but strong bilateral allies, and that bond between our two countries is not breaking. i know there was a mouthful. sorry. [laughter] >> [speaking in native tongue] [speaking in native tongue]

[speaking in native tongue] [speaking in native tongue] >> we also discussed the

tremendous sacrifices the polish military are making as a part of the isaf alliance afghanistan and reaffirmed what all of us agreed to at lisbon, that next year will be a year in which transition begins so that we can start giving afghans more responsibility for their security and, over time, make sure that our emphasis is more on training rather than direct combat in that nation. >> [speaking in native tongue]

[speaking in native tongue] >> i also think the president for the very strong support of the polish government, as well as the governments throughout eastern europe and central europe have shown towards the new s.t.a.r.t. treaty. as we embark on a debate of the treaty in the united states senate, i indicated to him how important it was for the u.s. senators to hear from those who are russia's neighbors that the field is very important to make sure that the new s.t.a.r.t. treaty is ratified so that we can continue the verification process that is so important in

reducing risks throughout that region. >> [speaking in native tongue] [speaking in native tongue] [speaking in native tongue]

>> finally, because our relationship is not restricted to security, we discussed a range of economic issues as well, including polish leadership on energy independence issues in central and eastern europe. and we also discussed poland's leadership as a key democracy and how it can help its neighbors to continue down a path of greater freedom and greater openness and transparency. >> [speaking in native tongue] [speaking in native tongue]

>> this year we marked the 30th anniversary of solidarity. and all those around the world remember how inspired we were by the brave poles who sought their freedom, including a young -- were younger -- president komorowski, who himself, was imprisoned. and we continue to draw inspiration from the tremendous strides that poland has made. we continue to deeply appreciate the strong friendship between our two countries. and i'm so grateful to president komorowski for having come here today because it is one more reaffirmation that our alliance is strong and will continue to be strong for decades to come.

>> [speaking in native tongue] [speaking in native tongue] [speaking in native tongue]

>> translator: ladies and gentlemen i would like to express the absolute same perspective on what happened in lisbon. >> [speaking polish] >> translator: this goes with for the full acceptance of the arrangements by nato as the first duty to future of the afghan operation. >> [speaking polish] >> translator: and first and above all this is about a reaffirmation of the significance of article 5 washington treaty. >> [speaking polish] >> translator: and we agree that would have been in lisbon

was the renewal and the reaffirmation of the internal cohesion of the alliance and also that sense of the existence of nato as the alliance as going to defend the territorial integrity of its member states. >> [speaking polish] >> translator: and this is also connected with the reaffirmation of the necessity to implement the language from the contingency plans in the form of sex or size is also nato infrastructure in the territory of the member states. >> [speaking polish] >> translator: an element of this is also the american activity and presence in the form of the military participation both in europe and poland. >> [speaking polish]

>> translator: nado now plays new rules, but it does not reject its old role, which continues as fundamental for its future. >> [speaking polish] >> translator: and i illustrate this to president obama in a very astute way, a very picturesque way. i simply said that if we are to go hunting very far away from our home we have to be absolutely sure that our house, our women and our children are well guarded. >> [speaking polish] >> translator: and then you hunt better. >> [speaking polish] >> translator: and i also wanted to say that this is needed to renew a and reaffirm

good polish-american relations. >> [speaking polish] >> translator: and the fundament of these relations is both american and polish love for freedom. >> [speaking polish] >> translator: and we want also to make sure that reaffirmation is a visible sign that these relations, instead of some of the difficulties under way are getting stronger and not weaker. [speaking polish] >> translator: fahrenkopf i wanted to say also that we talked about something that is very important for creating a very good texture for the cooperation between the united

states and poland. >> [speaking polish] >> translator: poland is economically successful. we are the only country that has kept positive gdp growth in europe. >> [speaking polish] >> translator: we want to see the greatest interest in the activity of the american capital in poland. >> [speaking polish] >> translator: however, on the principles of healthy competition -- >> [speaking polish] >> translator: because i am absolutely convinced that is in other areas of our life, in the economy, it also stands true good competition is always good. >> [speaking polish] >> translator: and the last thing that is also very

important as the polish attitude to the current issues which are very important from the perspective to the security of our world. >> [speaking polish] >> translator: poland supports and fully accept the aspirations for the ratification of the new s.t.a.r.t. -- >> [speaking polish] >> translator: -- because we believe this is the investment in a better and safer future. >> [speaking polish] >> translator: and this is also the investment in the real control over the current situation. >> [speaking polish] >> translator: if you live just next door with somebody for 1,000 years, it is not possible to reset all the past relations using just one push of the reset button. >> [speaking polish]

>> translator: we are not able to fully reset and delete 1,000 years of uneasy history with russians. >> [speaking polish] >> translator: but we do not want to be an obstacle -- >> [speaking polish] >> translator: we want to be helped in the process of resetting the relations between the western world with russia. >> [speaking polish] >> translator: we want to invest in relations with russia. >> [speaking polish] >> translator: two days ago when poland, we had a visit of president of the russian federation medvedev. >> [speaking polish] >> translator: and it is a were very open will of our greatest conviction and open heart with which we want to invest in better relations with russia. >> [speaking polish] >> translator: but we also are

absolutely sure of this old russian proverb you have to have the confidence but you also have to verify. >> [speaking polish] >> translator: because then, perhaps at the end of the process, we will also push the reset button. >> [speaking polish] >> translator: after 1,000 years of our history. >> [speaking polish] >> translator: and this is what we would like to have very much. >> thank you so much. we have time for two questions. i think on the american side i'm going to call on bill plante. sprigg mr. president, now that you've negotiated with the republicans are you willing to negotiate with the democrats that you treat them on the tax package? and when you talk to the republicans did they give you any assurances they would take a s.t.a.r.t. and "don't ask" in dillinger dhaka? >> first of all, bill, i think it is an accurate to

characterize democrats writ large as feeling, quote on quote, the trade. i think democrats are looking at this bill and we've already had a bunch of them who said this makes sense to the and i think the more they look at it, the more of them are going to say this makes sense. as it indicated you just had economics over the last 24 hours, 48 hours, examine this and say this is going to boost the economy, it is going to grow the economy, it is going to increase likelihood we can drive down the unemployment rate. and it's going to make sure that 2 million people who stand to lose on a plan of insurance at the end of this month get it. and folks who count on college tax credits or child tax credits or the earned income tax credit that they are getting relief and that tens of millions of americans are not going to see their paychecks shrank comes in a very first. so this is the right thing to do. i expect everybody to examine it carefully. when they do, i think they are going to feel confident that in fact this is the right course, while understanding that for the next two years we're going to

have a big debate about taxes and we're going to have a big debate about the budget and we're going to have a big debate about deficits and republicans are going to have to explain to the american people over the next two years how making those tax cuts for the high and permanent squares with their stated desire to start reducing deficits and debt. i don't think that formula works. but they'll have the opportunity to make the case. i'll have the opportunity to make the case that we've got to have tax reform, that we've got to simplify the system, that we do have to cut spending where it makes sense. but we're also going to have to make sure that we've got a tax code that is fair and that looks after the interest of middle class americans and continues to grow the economy. with respect to s.t.a.r.t., i feel confident that when you've got previous secretaries of state, defense, basically the entire national security apparatus of the previous democratic and republican

administrations, our closest allies who are most impacted by relations with russia, and as president komorowski indicated, have a thousand years of uneasy relations with russia, saying that the new s.t.a.r.t. treaty is important, that we are going to be able to get through the senate. that's not linked to taxes. that's something that's on its own merits close to get done -- needs to get done. and i have discussed it with senate republican leader mcconnell. i am confident that we are going to be able to get the s.t.a.r.t. treaty on the floor, debated and completed before we break for the holidays.

[inaudible] >> this is a question for both presidents. have you at all discussed the inclusion of poland into the visa waiver program? and if so, mr. president, what has your administration done in order to include poland into this program -- [inaudible] >> i will -- when will i answer that just very quickly. first of all, i want all poles and polish americans to know that president komorowski list this issue very robustly with me. i am well aware that this is a source of irritation between two great friends and allies, and we should resolve it. the challenge i have right now is that there is a congressional all the presents on the administration from taking unilateral executives action. so we are going to work with congress to make some modifications potentially on the law. in the meantime, what i indicated to the president

komorowski is what i'm going to make this a priority. and i want to solve this issue before very long. my expectation is, is that this problem will be soft drink my presidency. >> so it has not been you're pretty last two years? >> i'm sorry, what i said was that it has been a priority and we've been continuing to work on it, but it hasn't gotten solved yet. >> [speaking polish] >> translator: it's nice for me to hear president obama reaffirm that we have talked about it. >> [speaking polish] >> translator: i take these declarations with good faith. >> [speaking polish] >> translator: i feel simply

committed to say that polish public opinion completely does not understand why all the neighbors of poland, the neighbors of poland can use the visa program weaver and we can't. >> [speaking polish] >> translator: so poles some telco because we are members of the european union and we can travel and begin work in all the member states of the european union. >> [speaking polish] >> translator: so i just want to say that i know that it would be quite logical for us to be able also to travel without visas to the united states. >> [speaking polish] >> translator: but from the perspective of poland, we have said everything about it. >> [speaking polish] >> translator: and also i am

completely sure that this issue will be reconsidered and revisited by the american party, also from the perspective of the relations between the citizens of poland and the united states. >> well, mr. president, thank you so much for a wonderful visit. and i just want to make might want to know why that this beautiful christmas tree ornament from the president and it's already on my tree. we hung it up. and it's the prettiest one on the tree, you may want to take a look at it. >> [speaking polish] >> translator: i also want to say that i'm absolutely convinced that your numerous neighbors from chicago make exactly the same decorations. [laughter] >> [speaking polish] >> translator: and i also have a decoration from the white house, a christmas tree decorations, and i'm going to put it on my christmas tree in warsaw. >> mary christmas.

thank you. thank you, everybody.

now a discussion on competition along the food supply chain. we will hear about the relationship between food producers and the small group of large firms that find most of their products. the u.s. a culture department and the justice department post this event. it is an hour and 35 minutes. [inaudible conversations] >> good morning, everyone. certainly want to welcome everybody to the usda for the fifth and final in a series of competition workshops held jointly by the usda and the department of justice to explore the appropriate role for antitrust and regulatory enforcement and american agriculture.

i want to welcome the panelists will introduce in just a few minutes, and my good friend, the attorney general, who will also introduce in just a second. in my travels across the country, i've heard from those concerned about the future of american agriculture's. in these workshops we have been looking at a wide range of issues regarding competition and agriculture. and today we look at the dynamics and the interplay between age segment of the chain, margins in the livestock poultry and dairy industries and issues in the retail sector. the obama administration is committed to the most open transparent in history which is why we look forward to this dialogue with a diverse group of stakeholders regarding the agricultural marketplace. i want to welcome all of you to this workshop and to this hearing. today we intend to focus on a number of issues. we will explore and better understand how livestock and other agricultural commodities moved through our system and the

dynamics and challenges with each segment of the food marketing chain. we hope to explore margins in the livestock, poultry and dairy industries. and lastly we will focus on the potential implications of consolidation in our retail sector. i want to see these workshops have been very beneficial to me and to the usda and helping us understand the issues that are of most concerned deserve close attention. i accomplish the issue of agricultural competition is extremely complex. the ever-changing nature of the sector suggests the need to ask questions and shed light on issues that frankly have not seen much light in many years. president obama has provided a clear direction the government should be open and transparent, which is what these workshops are designed to do and be. we want to and we have a public dialogue on these issues. we have held workshops across the country to explore the appropriate role of antitrust and regulatory enforcement.

in march we had a workshop on c concentration in hog market issues and ankeny. in may we gathered in a normal alabama to discuss issues and discussed very issues in medicine was concentrated in august we export competition and livestock markets in fort collins colorado. in the workshops in my travels across the country, a number of things have emerged. producers want to have or maintain marketing options. they want transparency, they want access to markets, they have fewer by years with him to do business, and the struggle with the debt and face challenges accessing capital. and last, they just want to be treated fairly and with respect. most importantly of all, they care about the future of a culture and want it to succeed, which is why we have seen such an overwhelming response and attendance at these workshops. i for one am optimistic about the future of agriculture and i

think our best days are indeed yet at hand. for this to happen, we need to simply ask the right questions and not ignore warning signs. and if there are warning signs that we should consider to be america's meat sliced farms are barely profitable, and not always profitable enough to sustain a family. at the audio workshop, jim foster, a pork producer from misery, summarized his concerns as follows. he said my concern is not for me, but for my kids and grandkids. majeure they can pursue the american dream as my wife and i have. he compared what he saw driving through the ruins of fallujah and missouri in the 1960's to today. i saw home built called shelters and lots of rolling hills with new leaders. i saw barnes across audio with concrete pads out front 50 to 100 calves on feed. i saw veterinarians at work with their cash shoot. feeding trucks delivering feet,

implement dealers delivering a new maneuver spreader or feed grinder. today he sees very little human activity around what was once a thriving economic model. we all realize agriculture can't be exactly like it was 40 years ago, but the warning signs shouldn't be ignored either. in the past 40 years, the united states has lost 800,000 farmers and ranchers. and our remaining farmers are aging. from 2002 to 2007, the average age of a farmer increased from 55 to 57 years. and the number of farmers aged 75 years or older increased by 20% over the same period. while the number of operators under 25 years of age decreased by 30%. more than half of the rural counties are losing population based on the 2000 census. at today's workshop, we will ask more questions. we will explore more into margins and why the retail will give producers are shifting awa/ from them and what that all)/)+-

means.))i in 2009, a of a producer received 24.5% of the retail value of a hall of and it was over double the percentage nearly 50% in 1980. last year, 13.6% went to the packer, and 61.9% went to the retailer. cattle producers gets 42.5% of the retail value of this year in 2009 which compares to 62% in 1980. last year, 8.5% went to packer and 49% went to the retailer. today we will also explore what affects if any retail consolidation has had on the market place across all marketing sectors. and there are warning signs to pay attention to the house well. the fourth largest retailers account for 47% of the u.s. grocery store sales in 2009 compared to 34% in 2004, 20% in 1999, and 17% in 1994 to read

and we know that concentration can be much higher in certain regions. there can usually be an explanation of some aspects of these complex issues, but we must also ask if everything is fine, why don't we see young people getting into agriculture, why are people leaving the rural counties? at usda we take the warning signs very seriously and have taken a number of steps to assist producers and rural communities. the usda and the department of justice have established the agricultural competition joint task force to explore new opportunities for harnessing each other's expertise and improving enforcement of the laws decided to protect producers and protect the beef producers. in particular usda and the department of justice establish a process to handle complaints for unfair and deceptive practices in the poultry industry to more effectively and timely results cases, something that we feel will further facilitate addressing concerns we have heard of the alabama

workshop. enforcement of the packers and stockyards act was mentioned many times the workshops. and in the past few years, the president has increased the budget to include enforcement over unfair and deceptive practices in the marketplace. and the department is hiring attorneys to field investigators to how your complex investigations and other violations. usda's grain inspection come packers and stockyards administration, gipsa, published a proposed rule last sar for fairness and the marketing of livestock and poultry. we know it is sparked considerable dillinger stand discussion and now we have the public comments some of which we heard the call the rebel workshop three we will begin in earnest and in good faith to process these comments and draft a rule that we believe will be workable, feasible and common sense. in january, we put into effect a final rule to establish basic fairness for paltry contracts and in particular to ensure producers no longer have contracts arbitrer early canceled without notice.

this resulted problem that had concerned poultry farmers for many years and was frequently mentioned during number alabama workshop. i'm looking forward to the findings and recommendations of the dairy industry of fisa committee that i appointed to review the issue of milk price volatility and a dairy farmer profitability. the issues that were very important to participants at the workshop in wisconsin. the full committee report will be delivered early next year. in the meantime, we issued to a hundred $70 million in payments under the very economic loss assistance program, and $130 million under the milking, loss contract program, while we acquired 114 million pounds of cheese. the usda has worked hard in these tricky times to support agricultural producers of every size and type. and we are helping american producers by promoting exports abroad. this year we will have a record year in agricultural exports. and by supporting domestics and local regional food systems.

we are working to help producers with access to the markets in rural communities with investment and will broadband access. we are promoting the use of the agricultural products and paste for use in production of renewable energy across the country. and we are helping farmers and landowners capitalize on opportunities from ecosystem markets that reward them for taking care of the environment. so you can see we have been busy in addressing the challenges that exist in agriculture, and recognize that some would like us to do more and some would like us to do less. we want to focus on doing what is right in these workshops will further inform our work that we do every day. it is our hope that the dialogue that we have started extends beyond the last workshop and continues around the kitchen table and coffee shops and academic institutions all across the country. government may not have all the solutions to these problems, but together, we can continue exploring ways to address the challenges that exist. again i want to think you for attending and i want to think the panelists for their willingness to participate in

this workshop. all of the panelists and all who have attended these workshops are owed a debt of gratitude, and i went to thank the institutions from across the country that were kind enough t9 allow us to use the facilities to hold these workshops.! and now i would like to turn the podium over to attorney general eric holder for his comments. i want to welcome him to the u.s. part of a culture. mr. attorney general, you are welcome all the time that the usda. i'm not sure, but you may be the first attorney general in the history of the usda to come to the usda to discuss issues of competition in this type of forum. and i want to acknowledge the impressive career the attorney general has. he served in public practice as a u.s. attorney for the district of columbia, as an associate judge of the superior court of the district of columbia, and as deputy attorney general. he has worked to investigate and prosecute official corruption on the local, state and federal levels and is fully invested in strong enforcement of the

nation's antitrust law to advance the interest of justice on behalf of the american people. and i would want to say publicly to the attorney general i want to thank him and his staff not only for their commitment to these workshops but also for your willingness to work with us to try to was off to a decrease of claims against this department. so ladies and gentlemen please ring me in welcoming our attorney general, eric holder. [applause] >> thank you. thank you, mr. secretary. it's a pleasure to be here at the department of agriculture. and i think you all for joining us. i know that many of you have travelled a great distance to be here today, probably you have left warmer climates to come to washington and i thank you for that. and the perspective that you are bringing from the mississippi delta and south dakota, from connecticut, california and communities in between will be critical to today's discussion. i'd really like to figure out a way in which i can get one of

those hats. [laughter] this is the last time i'm going to have a chance -- i see these guys all the time with those hats and those big t-shirts said at the end of my remarks if i could meet with you all to discuss a way i can -- i'm from new york. i don't have a hat like that, or a t-shirt like that. [laughter] but you will represent many different regions, areas of expertise and positions and the agriculture supply chain. and you represent nearly every

i also want to recognize the outstanding efforts of assistant attorney general christine varney and the justice department's antitrust division. each workshop i have been impressed with the division's work in making the vision of these conversations a reality. and now that we find ourselves at the final workshop, it is clear that their contributions are paying off. we have learned a tremendous amount from farmers and producers -- and from industry executives and experts. and yet every expectation that the fruits of this workshop series will benefit the agriculture industry for years to come. over the last nine months, we have discussed everything as the secretary indicated from vertical integration and dairy prices to the implications of the packers and stockyards act and leading poultry industry challenges. psychiatry vilsack and i have had the chance to hear directly from the hard-working farmers and producers, business

professionals, economists, and elected officials. and the impact that those conversations had on our thinking. and on the enforcement strategies we are developing has been i think profound. of course, we know that interest in for some of actions will not solve every problem. we know that. but because of the insight that you have provided, and the blhae will be better prepared to take the steps necessary to ensure a fair and competitive and agricultural marketplace. both for producers as well as consumers. now what has been clear throughout this workshop series and in the thousands of public comments that we have received over the past year, and there have been thousands, is america's farmers and producers work extremely hard. the one to keep working hard and they are not asking for a

handout. what they want is a level playing field, nothing more and nothing less. that means they want market transparency, they want market access and the want market fairness. and my view and sick at three vilsack's view and president obama's view, that's exactly what they deserve. vigorous and appropriate enforcement is and he essential component of our commitment to ensure market fairness and robust competition. in addition to this workshop series, our commitment has resulted in a joint task force between the department of justice and agriculture that is focusing on agriculture markets and industry issues and it has resulted in a simple and accessible online submission process for reporting concerns and complaints. that process is outlined on the department of justice website and i would urge all of you to utilize it to keep us informed of any complaints that you may

have about unfair and deceptive practices. i also want to be clear about something. the critical channel of communications that we opened this past year and the secretary has indicated will remain open in the primitive justice and agriculture will continue working in close coordination to address your concerns and to ensure fairness and opportunity for america's farmers, producers and agricultural industry. all i am really proud that the the collaboration between the two agencies has never been stronger and that the level cooperation is driving meaningful, measurable progress, just last week ever joint efforts to resolve the long-running discrimination lawsuits reached a new level with the house passage of the claims settlement act. this legislation represents i think a historic step in ensuring farmers who face discrimination by their government receive the justice that the desert.

it also plans to seek further transformed relationship to the federal government and the many americans who rely on a fair and effective claims process. while i am proud of this and all that has, all of that has been achieved this year, i recognize we still have further to go after workshops on poultry, dairy and livestock issues, today we turn our attention to and after that cuts across all facets of the agricultural industry. pricing margins. i understand many of years we have encountered is nuanced, that is not black or white. i realize farmers don't receive their share, it can pose a serious threat to industries and to ensure fair and competitive sector cultural marketplace for farmers, producers and consumers alike. i know the pricing margins must be more fully interested. so i look forward to a candid and for this conversation today and to further discussions in

the weeks and months ahead. these workshops have marked an important and i think unprecedented chapter in public private collaboration. and although this is the last workshop, it is not a final chapter. as our conversations carry forward, i expect our efforts will continue to be sharpened and continue to be strengthened and i'm confident the nation will remain a great place to do business. thank you all once again for your participation and for your commitment to the goal we share, justice, fairness and opportunity for all. thank you. [applause] >> general, thank you very much in the process we have followed in the workshops is to open the workshops with remarks and fall with a panelist discussion and i want to take this opportunity to introduce some of the panelists. before i do want to acknowledge and sickened the comments of the

attorney general concerning christine varney for the and trust division. she has been passionate but these issues and at a free workshop including engaging in a free workshop and has been working with our team to better that communication. the attorney general talk about. so christine, thank you for being here. just to give you a little of her background, she has called leadership positions in both the public and private sectors from 1998 to 2009. she was a partner at hoeven llp in washington, d.c. where she served in a dual capacity as a member of the antitrust practice group and head of the internet practice group. from 1994 to 1997 she served as a federal trade commissioner at the federal trade commission and was leading official on a wide variety of internet and competition issues. prior to her service in the federal trade commission she served as assistant to the president and secretary to the cabinet during the clinton administration. thank you for being here.

now the panelists, and again we want to thank each and every one of these individuals for taking the time to be involved. i'm going to do this in alphabetical order and start with you. doug burkett is a farmer in mississippi. his family has for 121 years. once was a cotton farm and gross 16 varieties of such couples and herbs for farmers' markets and local cooperatives. he's a director of the mississippi association of cooperatives and of the federation of southern cooperatives land assistance fund and also president of the national farm family coalition. sitting next to him as gary carpenter, the ceo of the national meat association assuming this position in 2007 following the 57 year career at the usda. during his tenure he has actively represent the meat industry on an array of key issues ranging from food safety initiatives to immigration reform. he's been heavily involved in

export issues especially working with the usda and ust are to support negotiations including a caribbean free trade agreement to open markets for the u.s. beef and pork. sitting next to barry is eric lieberman, a regular for counsel for the food marketing institute. previously he served as a majority of regulatory counsel for the house small business committee. from 2004 to 2007, he was a director of government affairs at the national grocers association. prior to that he served as the legislative assistant to u.s. senator bob graham. sitting next to me on my left is vaughn meyer beef producer from northwestern south dakota managing a pure bred ingalls and red angus cattle differs abide by dry land farming is a seizure with his wife and son. the ranch was hosted in 1909 by his grandfather and purebred livestock was added in 1955 by

his father. the commission does a second lieutenant in the army medical corps and has been involved state and local national organizations including the south dakota stock growers, our calculus and u.s. cattle association. next to him is than vincent for pacific coast producers, grocery own cooperative founded in 1971 which is made up of 165 family farmers in sacramento valley. he served as vice president of the private seals for the monte food as was the credit for the bank of america. he's affiliated with the national council cooperatives, the council of california is an important member for stereo firms. sitting next to dan is chris waldrop colavita richter of the food policy institute federation of america and association of

nearly 300 nonprofit consumer organizations that seeks to advance consumer interest through research advocacy and education. chris overseas the research analysis and immediate of reach for all food policy activities at the institute so we have a broad cross-section of folks and the way this is going to operate, i'm going to open with a question and turn it to general holder and then we will sort of go back and forth. to get the audience just a sense of this, we know that consumers demand, and this is a question i am going to pose to all of the panels today we know the consumer demand is changed over the years and in some cases consumers are spending a significant amount of their food dollars away from home and restaurant, purchasing more prepared meals at supermarkets, and the retail market appears to be concentrated to the processing retailing side and that may very well be a reflection of these changes. my question is tell us a little bit from your perspective how

consumer demand in pact decisions on food marketing, and so those of you that work or represent at the distribution, can you walk us through how you ensure that that demand is being met appropriately? so let me start, ben, if you don't mind coming and we will >> thank you. in my area consumers want to the consumer that local

is the way to go. >> from the packing industry perspective, our customers obviously retailers and food service companies our feedback on consumer demand comes through as they place their orders and they come to us for new products. the message we hear loud and clear is some things haven't changed. consumers want to have quality products and looking for product that has value. in addition to that, they're seems to be more and more of an awareness of making sure you get what you're looking for. and that is being dealt with through progress. in a recent state come over two-thirds of the profit of the meat packages branded and the brands carry a message intended

to develop trust for the consumer so the consumers are looking for credibility and that they are what they say they are so from a perspective our focus is to be able to fulfil those consistent, high-quality products.

>> -- can you hear me out there? as a producer and representing producers, we notice there's been 20% increase in the last decade here of certified programs, branded programs, and we realize that's what the consumer is looking for, but overall, i would have to say that the producer out there is really having trouble understanding what the consumer wants because if you look at our cattle cycle from last year, we've been going through cycles of 10-12 years, and these cattle cycles as consumer demand decreases, then the cow number decreases and so on. those cycles are not there anymore. in 1980s we wngsed eight years

of dispersions and lower numbers, and since 1996, we've been on a liquid phase of the cattle industry. i don't know that producers know what to do out there. there's several reasons, the age of the producers is getting up there and there's imports coming in and taking that over, but we do recognize there's 20% increase in the brand of product, but at the same time it's tough to follow out there if you study the cycles and add on our lick dation fees. >> thank you for welcoming us to be a part of this and the 165 family farms i represent. the thing that really changed in the last 10 years and seeing in terms of marketing is, you know, how consumers determine the value has changed. it used to be just price, and now it's a combination of price quality and food safety

recently. i think we've seen that a lot in the last two years, and i think it's delivering that value for our business. it's a little different than the meat center store, commodity, or fruits and vegetables. we do private label, and that's been a major marketing trend for center stores. i'd also echo what eric said that the process we go through with our customers is set out an annual plan or a seasonal packer so you do it once a year. we have his historical forecasts and put that together and work on a week-by-week basis. we have things, bookings, they are just buying intentions, and we have to stay competitive throughout the year. >> i'm in a little disposition here because i represent

consumerrers producing food for them. i want to highlight one quick thing. consumers are becoming more an more interested in where their food is coming from, and it's echoed in the increase in the interest of the local and sustainable organic food, but consumers want more information period about their food, where it comes from is one issue. they also want to know that the food is nutritious and safe. they want more information about what the ingredients are, what makes up the food, so consumers are looking for more information about their food, certainly not less information these days. >> well, i think different parts of the agriculture industry faces diverse challenges today which are likely to change moving into the future. with respect to competition, each segment of the agriculture industry may have different

perspectives or how we can ensure there's a fair and competitive marketplace. i question i have for everybody is how do you foresee major differences in the industry from your perspective in ten years, looking ten years out, what do you think the major differences will be from where we are now, and following on that, what is needed from your perspective to ensure competitive and open agriculture economy in the future, so differences in the next ten years, and what do you think we need to do to ensure a competitive and open agriculture economy in that time period? we can start with ben again. >> again, i think, the compensation of the marketplace is really placing an impact on producers where you have maybe only four major chains controlling the majority of the market of fresh produce and

vegetables. i think in the future in the next ten years that needs to change and open up and be transparent where cooperatives or signal farmers can be -- small farmers can be a major player in the market and receive a higher margin of the profit back to farmers. on the current structure we have now where the concentration in the dairy industry and growing vegetables with only four or five, and i think that should be -- i don't know how you can change it, but in the future it definitely needs to be restructured or opened up to different avenues of marketing instead of the distribution that we've been going down to the last 15-20 years. it needs to be reorganized from top to bottom. >> can i ask a follow-up to that? >> is consumer demands going to

drive part of that? >> most -- consumers are very aware of wanting to know where they food comes from. they want to quality of it, the safety of it, and i think family farmers in the middle of those are not necessarily the huge operation, but those truly with the farmer's operation is they would seal that bond and farmers would know that a tomato -- >> when looking at consumer commands and what differences we see in the future, clearly it meets in the industry are going to have to go is to focus on those needs, and when you look at where they are going, certainly i mentioned earlier the brand of the products is two-thirds of the market place, and that's likely to grow, and bringing in products we bring

stainability and locally produced, specialty programs for natural and organic, those are all going to continue and probably grow in the marketplace in looking at demand. what that does to the industry is that really dictates the need for relationships from the consumer back to the producer, and in order to fill those orders for natural organic or whatever it might be, you need to have a relationship from the production sector to the packers to the marketplace so that you can have a consistent supply of those products. consumers don't continue to demand that not only they have those options, but also that they can consistently get those, now, as far as things that need to happen to get that done, you're really going to have to look to these long-term relationships to be able to create some value. the producers are creating value

in life stock by going to the extra call, for example. they need to know they're going to have a mechanism as it moves through the marketing chain. to see success in the industry for all parties, and that's what has to happen for industry to continue, you're going to have to see more and more communications up and down the marketing chain and more cooperation to really target the need of the consumer because that's ultimately what the whole industry is all about. >> well, i think when you are looking to the future in the retailing side, you're going to see continued diversification of the market place. we've see that already now. it's amazing how the market changed. 30 years ago, folks had to buy their groceries at the supermarket, but today it's diverse, so many retail channels where you can purchase

groceries. you have the connectional supermarkets, superstores, chain drugstores, natural food stores, and dollar stores, so folks are going to more retail channels now and this resulted in very intention competition, so we're talking about markets pending a dollar, and in the future i think we'll continue to see cost diversification and require more competition and lower prices for consumers. you know, in the 1940s the american family spent 19% of their income on food eating at home. that's 5.5% today. this increased quality of life and increased competition is helping americans and i think it will continue in the future. >> i agree with a lot of that of what was just said. what we see sitting on the angus

board, we seed a lot of demand for natural products. we don't see these going any one way. you have this group who wants that and that, so i believe that in the next 10 years we will probably see a lot of that. as far as communication at all levels coming back down from the consumer to the producer, we definitely need that, but the main thing of communication from that period from a standpoint of producers is that we have to be there just to struggle to be there in 10 years the producers will have quite a feat. at the rate we're losing 1,000 producer a month, that's alarming. you know, we're ready to work and listen, but we have to be there first on the thing. we got to have fairness in the markets, and we've got to have -- we've to be prepared for the product. that's the main problem we

have. we have to be there. if you look at the consumer pricing last year up on all food product on 1.4%, and we out there as producers have a lot of fixed cost in that where our fuels, all fuels went up 5.4%, gasoline went up 9.9%, diesel fuel went up 14.5%. that's nine times over what we increased in food. our struggles as far as producer in the next ten years is just trying to be there to produce those foods for the consumers. >> well, i think what we've seen coming in the next ten years is looking back the last ten years the trend we saw with son sol dation. the -- consolidation. ten years ago the top ten accounts in retail were 50% of our revenue. today, it's 10%. we have two accounts now that

make up 90% of our foos service business and they pretty much sell every account in america. i see that consolidation, at least the trends we see in the new customers we talk to, and i think eshic's right, it's kind of spreading out a little bit, the new players, limited assorted players, trader joes, those kind of people, i think that level of consolidation has peaked, and now it's going to fracture a bit which i think is good for everybody, and i do think looking into the future, i think a lot of these current issues that are important to consumers like food safety, sustain blght is a huge -- stainability is a huge deal. we do stainability in farm up to the supply chain, and ethical practices are becoming a big issue now, audit, i think that's going to continue, so -- >> chris? >> on a couple things in terms of consumer demand in the next 10 years, i think there's going

to be an increase in consumers wanting to eat healthy, wanting healthy nutritious diets through increased fruits and vegetable purchases, but increase for demand of information on food and having nutritious and convenience will be a driver for consumers. a lot ofous households have -- a lot of our households have two incomes so we want something easy. we're not getting any less busy and as consumers we become more educated overtime and incomes increase. there's a variety of foot and having a true variety that's available. i want to caution us in making broad statements about consumers. it may be true that consumers generally have more access to groceries in various retail

outlets, but that's not the case of all consumers. low income consumers, especially folks in inner cities, they don't have the same access because of a lack of retain establishments, and usda is trying to change some of that, but there's been a long time period where we had consumers, low income consumers in urban areas have not had access to healthy fruits and vegetables and other healthy foods because they don't have access to retail outlets. >> chris, let me add to that, it's not just urban centers. >> okay. >> there's areas in rural communities where you are 20 miles away from the nearest full-scale grocery store. it is an issue, and it is one we are trying to address at usda. i wanted to touch on something that vaughn said to give people a touch of this. if we went back to 1980 and asked how many pork producers there were in the country, it

would be 167,000 pork producers. today67,000. 90% are out of business. cattle producer was 1.6 million in 1980 and now there's 975,000. in the dairy area going back ten years asking how many producer there were there was 110,000 and today there's 65,000. to reenforce the concern about the fact there is a reduced number, and if you look at the people that produce the bulk of our food, 85% of our food, it's really about 200-300 farmers, and if you look at farmers generally, it's 2% less, and roughly one tenth of 1% produce 85% of our food, and if you look at who is making money in farming, and who is just barely making it, what you're going to

find is 1.9 million of the 2.2 million farmers in the country are losing money or are in the one of the best years we've had in awhile where farming is up 31%. those farmers in the middle make an average of $64,000 in the -- 6400 in the farming operation. that's not enough for a family. that's the challenge. the folks producing the most will do well financially this year, but the bulk of folks who farm may not which is why we need farm income and rural development. that raises the question. i want to post this to eric and barry, and dan, if you want to pipe in, please feel free to do so. i'm curious. in terms of the relationship, you talked about relationships, are you seeing the more specific requirements being demanded from

grocery stores, and specifically is there a difference between the large operations, the walmarts, the safeways, in maybe smaller independent operations in terms of what they are demanding. >> i'll go first. the demands are very specific in most cases. the relationship between the packer and the retailer, and the food service generally tend to be long term relationships, so what happens is the packer actually works with their customer to identify what their specific needs are, and even to r and d to develop products that they want to sell so they can maximize the value of that product, so what we see happening is you see communications and relationships

becoming stronger and stronger between the packer, processers, and food retailers. you can't satisfy those needs without those relationships back to the suppliers because many of the attributes that are being demanded by the retailers and food service originate with the life stock, so in order for the packers to have a consistent supply of those products that are unique to those retailers, they have to have arrangements with their suppliers so they know day in and day out they get a consistent supply of the product. as far as the size of the customer, there's not much variation there. they all have their niches and needs and what type of products they want to sell to the consumer, and they come to the packers, and they target those. one of the complex things in the packing industry is different packers have different customers, obviously, and they tend to be long-term customers,

so the type of life stock that one packer needs to fill their orders, may not match another. one packer is willing to pay a premium for may be a price for the packer because it doesn't fit their mold. this connection from the product of life stock to the ultimate consumer is very critical, and the attributes that they are willing to pay for and up zest on have -- insist on have to flow through that process. it has to be a very transparent process so the message goes quickly from the consumer back to the life stock producers so they can sort the management and target the needs of the market marketplace. >> mr. secretary, i think it varies. when you look at our members, some of our smaller guys like the branded meat programs and use it to meet the demands of their consumers. some of the bigger guys like the

branded programs, others don't. it's not a priority for them, but a number of retailers do have specifications for the meat they sell. they may relate to breed, consistency, animal welfare, or something like trade size, and retailers pay premiums for these products, and this is increased the quality of the meat that you're seeing in the store, and also combined with a vigorous competition on price, it's help to stem the decades long decline to meet con sulings. meat consumption supplies from 1989 to 1998 declined 50%, and that's stopped. i think value added branded programs have reinvigorated consumer interests in the meat case. our last meat survey says quality is the number one factor in retail, and i think some of

the premium meat products are bringing more quality to the consumer, and that's generated demand. >> and how about on the vegetable side? >> the demand changes growing? yeah, definitely. those have definitely changed. they are asking for us to add a lot of value to the equation for the retailer or the food service distributer and ultimately the consumer. probably the biggest one, you know, in the past ten years has been managing supply chains. before it was all picked up for products west coast, and now it two days to market with 48 warehouses to manage and they expect us to manage the inventory and get them to market, and that's why the relationships are important because you move inventory all the time to keep them stocked. we talked about sustain bilityd, ethical practice, those are really hot items.

food safety is the biggest demand that's been asked for. like at our plants, there was 45 separate audits last year. these are customer audits. the big initiative that i think we'll all see in the next couple of years if we're already there is global standard safety initiatives. we're at level 3, so i think you'll see everybody there. >> chris, question for you. you touched on this in the your remarks, consumer demands have changed, and some say they changed to operate under increasingly tight budgets. both parents work, you know, long hours, and families need food that's quick and easy to prepare. i know that's how my household works, and you have sometimes one person preparing the food,

and that would not be me in my family. [laughter] has your organization done any studies or have any perspective on how these lifestyle changes impacted consumers and changed consumer demand and do the options that we see on store shelfs dictate consumer choice? do you feel consumers have more or less traits today than perhaps they did in the past? from that perspective, is that good or bad state of repairs? and about prices, do you think prices have stayed roughly the same over the years? have their increased? have they decreased? and if you think they have increased, what do you think is leading to the higher price? that's a whole series of questions here, but have at it. [laughter] >> i'll try to hit them one-by-one. i think that the issue you bring up about consumer's busy lives

and two-income households, that led to consumer demand for veensz, for -- convenience, for food that is already prepared or partially ready to eat that consumers can take home, heat up, and serve as quickly as possible, and we've seen not only food companies, but also retailers offering more packaged foods, ready to eat foods that you can go there, get a roasted chicken, and it's ready to go. those types of things. on the issue of choice, i think there is more choice than we had, you know, decades ago, but part of that, i think, is the allusion of choice in that one company is honing many different brands so consumers may be thinking that there's a difference between a couple of different types of food, but it's all owned by the same

company, it's just different brands under one company. consumersment more information about their -- consumers want more information about their food and they don't have that to make informed decisions or understanding of what's going on, and then on the press issue, i think prices have gone up over the past, you know, decade. the, i think the key issue though is how prices go up in relation to what the farmers get. if the farmers are getting additional money, and then -- or let me start again. if supply goes down and prices go up, prices go up pretty quickly for consumers, and consumers have to pay that price. when supply increases, prices don't go down as quickly as they go up. there's a number of different reasons for that, but that's something consumers deal with in having to pay for.

when those prices go up quickly, they have to pay for that often and go down as rapidly, and that affects them to a greater degree because they spend their disposal income on food. >> you talked about -- >> i just wanted to address kris' statements about the crieses going up. that's not by the stalks when you look -- stocks. when you look at money sphenltd on foods in regime at home -- when you look at money spent on foods from home, it's plummeted. 50% of our family income on food, but now it's 5.5 pcts. i just wanted to make a comment on that. thank you. >> chris? >> if you were paying a small percentage of our income for food, does that mean that you

know, that the income that we have has increased in relation to the prices that are charged or is it that prices have gone up? what do you think the variables are? >> well, when you look at that statistic, that's the real cost delivered to people. the real cost there's no question that it has gone down tremendously, and that's certainly raised quality in our country. you know, even today and other industrialized nations, they spend 15% on food. look at russia and china, 30%, indonesia, 50%. you can see how that raises the quality of life in our nation, and it's essential to consumers. it's beneficial. >> i want to make sure there's clarity on this point. there's a difference between what we spend for food at home and what we spend for food totally. >> right. >> we obviously spend a lot of

resources -- >> now we spend money at restaurants. >> right, so what is the percentage of what we spend on food in total? >> that has dropped. in the 1940s it was about 20% on food total, and now today it's around 9%. it's dropped tremendously too, but for food at home, purchasing at at supermarket, that's dropped at a faster pace. >> can i ask a question there? is there a component to that due to flongsuation and consumers cut back. i remember growing up when milk got expensive, and we would cut back on milk. there must be a myth in the basket that also -- it seems to me prices have gone up and down at the retail

level. >> yes, prices flux chat, but they are including the staples. consumers will buy milk, meat, produce. we need that to sustain ourselves. they have changed, but because the competition is so intense in our industry and the margins depend on the dollar, the prices consumers are paying have declined consistently over the past many, many, many decades. >> if i may, when prices go up, they go up quicker than they go down. >> that's also a phenomenon found in all industries too. that's because the decisions you have to make to lower prices take a longer time than they do to raise prices because you have to get labor, expand production.

you take a bigger risk. that's the bottom line, and the justice department did a paper on this recently explaning that phenomena. >> i'm curious, the word relationship is used here frequently in the short time that we've been visiting here. for the producer, i'm interested in your perception of that relationship, and for the folks who are representing packers on the retail side, are these relationships because they are long term, is it more difficult than for someone who wants to develop a relationship to be able to do that? in other words, if you are having a relationship, a packer to a retailer, how does another retailer engage in an opportunity if the relationship is so strong and so long term? we'll go right down the line. >> speaking from the producer

side, it takes a year to build a relationship to become a vender or a whole foods or a safeway to get into that door. it takes several years and producers on my side, it takes a long time to develop that relationship. i tend to disagree that the variety of food in the supermarket is more. i think it's even less. it just been repackaged. it just been different branded, and if you go to the supermarket now, you were buying a pound of leaflet toc, but if you look at the bag, it's 12 ounces or 8 ounces now. i think if we are to continue 20 years down, we want more farmers, more of that retail dollars have to be returned to farmers.

i know the gentleman stated that the supermarkets buyer told me they operate, i find that hard to believe. if we're going to profit, we have to increase the number of farmers we have or hold on to the ones we have so the margin is a great return to the farmer, and that's the only way we're going to increase the number of farmers or maintain the ones we have because what we are receiving as farmers is just too low to continue to operate. >> well, when we talk about relationships, i think they take lots of shapes and forms in the industry, but clearly as you're trying to satisfy the need of a customer, you feel this trust is built up, and the product

development associated with it is built up, and it makes it very difficult for others to fit into that mix especially between a packer and a retailer, but certainly the overriding factor is competition and ultimately price and the desire to keep the prices as manageable as possible. on the other end of the equation, the relationship with the producers is somewhat different in the sense that producers depending on the complexity of the product, i use an example. if you're producing cattle transport to europe, that's a lifetime commitment that they have. you're looking at probably 20-24 months commit on that animal before you can market it. it's very unlikely that producers will get into that marketplace unless they know they have a commitment to buy that product so it can be marketed in a marketplace that will catch full value. those kind of relationships become fairly firm where they really have to target very

specific atritts. -- attributes. in the case of lesser demand, maybe something like on the angus program, the relationship is not as firm, but there needs to be a relationship there because you're going to supply product, and if i'm supplying this product, i want a premium for it knowing ultimately the consumers paid for the premium. they want to pass need funds back through, and everybody that added the value can cash in some of that value in the process. i think that the relationship is critical. it's certainly there are opportunities given the cattle size right now, and especially the demand for life stock is certainly much exceeds the supply side. most of the packer members are not near full capacity, so there's certainly demand there. the export markets are there,

anded demand is there, so if a producer has a product that fits the need of the ultimate consumer, and there's a packer that services that consumer, they are all welcome and invited to be a part of the marketplace because the demand is certainly exceeding the supply in these unique programs. >> thank you. >> it's all about meeting the consumer. it's working with suppliers large and small. we're interested in any product that consumers want, and with the smaller guys, many of the retailers work with them to help innovate products that meet consumer demand. we have a lot of resources that can help suppliers in terms of consumer behavior, so we work closely with them, and even on safety standard, we'll help smaller, some of our members work with the smaller producers and suppliers to help them meet the rigorous safety standards we

have and make sure all the foods we're selling are safe, so we -- yeah, there's lots of opportunities. >> if i understood your question correctly r you kind of related how to retailer get in with the wholesaler, the opportunities once they're going with the clients. the only connection i have with that is through the angus association and certified angus beef. they have to meet certain specifications and jump through hoops, and we monitor them when they are on and make sure they advertise our product. we have no problem. there's usually quite a waiting list for people to get on with that, but we work with them and make changes where possible, but as a producer, there are

producers out there, neighbors and friend who market their cattle through various programs like all natural and a third product, and, you know, they have been careful with the shots and documenting all of that. most do it for a year or two and switch to go somewhere else because the premiums are not there is the main reason. i guess they start out with great hopes in that and find the extra cost of the workload in that and it doesn't work that way, and you usually see them switch. in order to join those verified programs and a lot end up feeding them through custom lots and signed contracts, some of those are open of ended -- open-ended contracts on price, and those prices will be on the base price the day cattle are harvested, and base prices are usually on a diminishing scale. it's usually going down.

i myself have said that cattle for three consecutive years where some of those cattle went through a brand of program with the association and some of the cattle went along of the same time and same genetic makeups were of a different breed, and they went through the cash price for that day, and the cash price or the base price difference between the ones that went through there was anywhere from a dollar to $2.75 lower. as a producer, they usually get discouraged because there's no firm price at the end of the rainbow for us. >> a question on the relationships. you know, you know, the one thing we bring as a supplier is we have a cost. the farmers have a relationship with the retailer or the food service contributors. that's something we bring. with that said, i think it's, i

think ben mentioned it, i think it would be very difficult to be a buyer mainly because it's varied. they have been consolidated too. there used to be 10 buyers, and now there's one buying 10 categories. they are busy and one of the relationships they value. if you take care of equality and supply chain and keep those in line, that's what they value and get business year to year. you still have to be competitive with that said. both of our major food suppliers put us out with a bid this year and lost businesses we've had for years to a chinese importer. you still have to be competitive, but i think those things you add, the things that they value in the relationship are important, or i know they are, and then we have to keep it every day. >> that particular relationship is sort of outside of where we

are on consumers, but i will say there's a small, but growing segment of consumers who are settling their own relationships with farmers and places that provide food in farmer's markets and things that are going directly to the source and getting their food that way. >> the issue of margins is often the topic of discussion that comes from the producer level and a retail level. some have said a retail or a packer profit margin is very thin. now, without getting any kind of proprietary information generally speaking, what are the margins that a retailer contends with or what does it take to generate a profit? what are the fixes variable costs that retailers operate under and packers pass those costs on down the marketing chain? >> i'm happy to address that, mr. attorney general.

profit margins in the industry are very thin. we're talking a penny on the dollar, and i think there's a misconception to that meat is a profit center in the stores. i know when i joined the industry, i thought it was, but that's not the case. meat is frequently a loss leader and the margins are meat are considerably lower than the margin on the average product in the storement now, like other -- store. now, like other products, competition is really fierce on meat. there's been discusses about the farm-to-retail spread determined by erf, and how the long term trend shows that spread widening, but i think it's far too simplistic to look at the spread between the farm price and retail price and assuming the retailer is making profit on the meat. it was cautioned about using the data in that way and stated the retail value figure they figured

overstates retail values and it's not a good measure of what consumers are paying in the store. one of the reasons is because it's not volume weighted. you want prices that generate demand, and a huge portion of the meat products sold are on sale or on special. there's also an assumption in the erf data that supermarkets sell beef from a wholesale car cues from the day they purchased it from the farmer which we know that's not true because of the time it takes. the cost we face, of course, are transportation, warehousing, labor, refrigeration, rent, overhead korsts, and those are not reflected in the spread data, and these costs are high, and they are growing. it's also important to consider that we can't really pass those costs on downstream. it's very difficult because of the intense competition on

price, so it's also important to contemplate that supermarkets just want meat too and restaurants and exports have become more important. usda say the retail price has less of an affect on retail prices than they have in the past. >> where do you look for profits? i mean, where do profits come from if meat is as you say, sometimes a loss leader or the mar margins are very small? >> yeah, profits are higher on packaged goods. >> okay. >> and they are a little higher in produce too, so those are some of the areas where the profit margins are better, but they are really, really narrow. >> how about dairy? >> i don't have the dairy data in front of me, but i can go through the files and get that.

>> i can add to what you just said there about the costs are not passed down. you're stuck with them. i agree. a large margin of them are not big in that, but indirectly, all costs when the consumer quits buying comes back down to the producer. they come back down to the wholesaler, and the whole wholesaler has one or two things. he can drop prices to you or cut production. he has costs to meat and production lines he has to keep busy, so usually the alternative, and nearly 100% of the time is to lower his procurement costs. indirectly all costs do come back to the producer. >> we've also talked in addition to relationships about the word drains paraphernalia sigh and -- transparency and i'm interested

on all the panelists commenting on this about the market chain and what you know about your piece of it or whatever it might be or whatever your organization whatever piece your organization might be involved in. do you believe there's adequate transparency in communication in the chain today? if you do, fine. if you don't, what changes would you suggest we consider? let me start chris, if i could start with you. >> sure. i would just point, again, to the information needs of consumers, and how those are not always met. an example of that is country origin labeling which was thought for a long time basic information where commodity products come from. we do not have that information. that's not on all products. it's not on packaged goods or dairy and some other areas, but

that's an area, again, where consumers could have more information to be better informed when in the marketplace. >> yeah, i would say you're right, chris. i didn't think of the dairy in the transparency, but there is transparency of what our customers ask us about retailers. they need to know where the products are grown for recall as well. we have farm business every year, and then on the information side, they need transparency to know where the products are at all time all the way from distribution and pickup. >> about pricing? is there adequate transparency in pricing? is there adequate information for a producer to know that they are getting a fair price? >> oh, for our producers, it's pretty simple because we're all -- they have commercial price

negotiations, so all of our products are represented by associations like the california tomato growers association or the peach association, so there is a mechanism to cool all of that, and then find it. it works well. if our producers are not getting the price they need, we see the supply go down, and we don't negotiate, but our target internally is to meet commercial price, or we wouldn't have a co-op if we didn't do that either. >> as far as transparency as the label offering, there's producers out there that are willing and many of them are working with that now today to identify their product and pass along that information on to the wholesalers. whether it gets on to the retailer and customer, that's a big if. i suspect a lot of that gets lost along the way. i have neighbors documenting

where the calfs are born and the treatments they've had and when they are born, but you never see that at the retail counter. it may help sell the product to the retailer, but i don't know if the consumer is getting that. transparency on price, there is no transparency. we're at the mercy of whatever they want to give us out there. 66% of the markets are now through contracts, and many of them are open-end or alternative marketing agreements, and those really are working against us because they have a group of cattle under that contract that they know they are coming on such a date, and if there's enough cattle in there, they don't put kids on any of the cattle like through the auction markets. they tell the buyers not to bid because they have enough for a week or two, or if there's an

import product coming in, that works against us too. they may even use that nonbidding process and they own a lot of cattle themselveses, 10% of the cattle that go through a packer owned cattle, and they can bring them in and not have bids for a week or two, and those are cattle on feed to wait longer on feed and that increases our price too. basically, there's no transparency, has not been any, and the best reference to this is the fact that in the farm to retail spread, we've lost 20% of our retail value between 1970 and 2002, and if you check that out, the wholesale end has picked up 20%. >> there's no question that prices are more transparent for consumers at the retail level. i just got a smart phone not

that long ago, and it has a bar code application in it, and i can scan the product in the store and get a price online for them and see what other retailers are charging, so that's quite remarkable, and it's driving competition and making the consumer even more aware of the prices, so i think the trend is with increased technology and more of these apps, we're going to be seeing even more competition and more transparency. >> erik will show you that app at the conclusion -- [laughter] >> transparency in the market place is very effective in the life stock industry. that is very well driver by usda demand for price reporting. the packers report all their transaction on the life stock as well as their sale of products, so that information on the value of the product is very available. it's online. it's a very timely information

multiple times a day. i think when you think about pricing in the life stock area, it's all out there for the industry to look at. when you start talking about things like price from farm gate to retail, all the sudden they are losing sight of what they are trying to be transparent on. this -- when you look at -- when you look at price trends and compare it year to year, you're really apples and oranges at best. just looking at the meat industry, a few key things i would mention that have changed the spread from farm gate to retail or to food service, when you start thinking about regulatory changes, food safety changes, food safety alone in the last ten years, the number of additional interventions included in the packing industry, the cost of regulatory

impact of that, the cost of recalls, the cost of testing, the additional costs that have been incurred by the industry just to get products through the process totally differ from the way they were 20 years ago, and as you said, looking at key things, product changes. all of you can remember a retail market and the traditional trim was a half inch of fat up to an inch of fat. that's not there anymore. that product has changed. the process has changed. it's really erroneous to start looking at a trend compare year to year. it's requiring different information to see that spread. if there's a lack of information or transparency is really misguiding. >> from a producer's stand point, i don't see any

transparency. from the time a farmer plants a seed or births an animal, you are looking at the long term commitment there. dairy farmers, these cows have to be milked every day. when you have a sale for this milk, whether you get 1600 or $21 per week, you still have to milk the cow, and in the case of where that money goes, a plant of watermelon seeds in 90 days is ready to be harvested. i have a parishble product. consumers can use that because they know what we are growing has a life span. we have to move the product. we need that support of the safety net from usda, from the justice, and from the industries. we are secured by a prayer in

the marketplace so we can survive. transparency i don't personally believe it's there in that sense from the producer side. >> a last question to a follow-up of what ben was saying. it's obvious that producers need packers just as packers need retailers and the marketing outlook. everybody here works in agriculture in one form or another. as a wrapup, i'll make you kings of the industry. you have absolute power. what do we need to do to make sure all segments are profitable and there's fairness in the market. what would you do, total power to ensure profit abilities and fair -- profitability and fairness? ben, you. >> if i were the king, i would do with the all the major corporations. [laughter]

>> that'll take care of it then. >> yeah. [laughter] >> while i'm king, i'll do it a little differently. [laughter] i think, of obviously, food is essential, and the more cost effective that process can be, the better, so i think the more we can strengthen the communications and relationships between the producers of life stock to the ultimate consumer, the more efficiencies you build in the system, the more, the better quality, the meeting of needs. with that said, everybody in the sector has to be in a profitable situation. that doesn't exist. packers incur certain costs that need to be dealt with, but in order for the industry to survive, you have to maximize the total marketplace, and that's looking at things. if i were king of the day, we'd do away with the market access

issues we're having. it's limbing the ability to cash in on the physical -- full value of life stock. we need to take out restrictions and the burden that's in there to make it more streamlined and more efficient for everybody in the whole marketing chain to be successful. >> well, -- and that's just left with the best food in the agriculture system in the world. we enjoy the safest, best quality, freshest, and best food in the world. everybody here deals with that system. they have expanded access to quality and american goods to the american people and both usda deserves a tremendous amount of credit for that miracle which is our food system. it's a question of improved quality of life, and this is essential to the american way of life. competition is why our food

system is so phenomenal. our retail profit margins are thin, and surveys show that shopper satisfaction continues to rise and 6 out of 10 people recommend their store to a friend. the purpose of the antitrust laws is to protect competition, not competitors. competition is more intense that it has ever been in the grocery industry, and consumers are benefits greatly from it, so this competition must be maintained. >> i agree with what was said on communications to keep communications in this industry, and if we do enjoy the faith of food in the world at this present time, the producers out there, a lot of them are a very

patriotic bunch. they realize what they have in this country, and most of them want to continue to see that this is a great country, and there's great concern out there by the amount of food that's not coming from our country anymore, and that some of our better food that is being ground and added to that product to make it better, but there's still a safety factor in there. i would say a lot of producers are concerned about that. as far as competition, we -- the best thing as producers can use out there is a lot of people, and i've heard it here since i got here, are talking we don't need more government telling us what to do and all that, but we had the packers act since 1971, and it's done nothing to us. we need some rule if packers are going to remain in this game, otherwise we'll see producers in

mexico, canada, other places. you won't know of an american producer pretty soon unless it's a giant firm that's running tens of thousands of cattle out there with a contract with the packer. the family element is in real danger as far as production in agriculture is concerned, so i guess the best thing we need to do something now and quick, and the best way to enforce the rules has been proposed in the last year, and i guess i would like to see these rules enforced. there's things that may have to be addressed in them in the final rule and changed to make them more workable and everything on that, but these rules are designed to prevent the injustices from happening, and part of these rules also say that if those injustices continue, they will give me or any other producer out there the same options to go into court just like any other american or any other american industry or entity, so we need to have the rules and we need them

immediately. [applause] .. we are asked to do a lot of things, especially in california with environmental air. we have 4000 jobs we provide good working wages. we do a lot of good things i

think are important and i think ultimately good for our country. but it's very difficult when i have to compete against in import where none of those things are required except the price. and somehow that value is implied when you find in america. i don't know what that come from, but it has to be recognized. >> i'm a consumer advocate, but to hit on a couple for the purposes of this discussion, one would be information that is 54. that's where consumers to be able to have enough information to make decisions when they're in the marketplace. i would improve access to food, but specifically healthy nutritious food that is affordable, particularly for low income. and because i do most of my work i do have the safest food supply of the world.

it's not as good as it needs to be and can be in a 5000 people to get sick every year -- die every year from foodborne illness and that is something that i would approve. >> well, thank you all very0000 much. we are going to give the attorney general an opportunity0 to close, but before i do, i0 want to thank the panelists for their informative and interesting conversation and on0 that points out the complexity of these issues that we're0000 dealing with and the difficulty in determining at what point to and then the second panel will be focused on margins

in the dairy industry. mark tobey was a special account for agricultural antitrust division of the department of justice will moderate a panel discussion. and that'll be followed by public testimony, an opportunity for people to put their comments into the public record that are assembled from these meetings. they will be a break for lunch and then we'll have a third ammo focus on issues in food retailing, going into more of the issues that we talked about briefly in greater depth. again, sure as those in who is the chief of staff of the food division will moderate the decision. i will be followed by a break and then the final panel which will begin the livestock and poultry industry. jay's journal was from the usda will be moderating a conversation. what havoc in additional conversations for public testimony if we hadn't included all of the remarks earlier and then we will close hopefully

sometime around 5:30 this afternoon. i want to thank everyone. general. he made a pledge to be fully participating in these hearings and i appreciate the fact that he has traveled and not christian varney has traveled to his to the folks who are farming the land and you are responsible for the food supply we take sometimes for granted, a food supply that is abundant. if that's what it does provide us greater flexibility their paychecks and most of the folks around the world have any food supply that comes from folks who really do believe that the basic fundamentals of this country and you simply want a fair shake in return. so mr. attorney general, for his stories. >> loafers, i think i saw the other panel that i participated in conversations that we've had

this one for me but has been extremely enlightening. i think were talking about, you know, a segment -- a fact or of our economy that's really more than that. it is defined, i think, what the country has been over the years, who we are as a people, who we are as a nation. and i think it's an important thing for us to focus on because they think we will find who we will become in the 21st century and even beyond. our concern that the justice department as well as agriculture is to ensure that we have fairness in a good and important part of our economy, that it is as profitable as it possibly can be and that we put as much transparency into the system as we possibly can. so that ultimately all components, all parts of the sector do well and that the american people ultimately are the beneficiaries of our action.

we are under bernie's leadership determined to stay tied with agriculture in ensuring those three things. as i said fairness, profitability and transparency. unestablished between justice and between agriculture that did not exist before, that existed before. our pledge and the obama administration is to stay involved, continue to listen. we have thoughts, we have ideas, but we know that we don't have all the answers. but as i think one of the real values in these workshops that we have had. we will use the information that we claim from these workshops and then from the thousands of comments as i said that we have received as we are developing enforcement policies, practices so that we do all that we can to ensure the continued viability

of this very important part of our economy. so it's been a real pleasure for me to be on this panel with all of you any real pleasure to have this new relationship with my colleague at the department of agriculture. >> we will reconvene at 10:30. [applause] [inaudible conversations] [inaudible conversations]

>> earlier, and the ambassador to the u.s. discuss globalization has changed the relationship between the two nations. he spoke at the heritage foundation. this is 40 minutes. >> so now i would like for all of you to join me in welcoming ambassador meera shankar, who can shed some new light on these issues. she is a great friend of the united states. she is very knowledgeable about the united states. she is certainly a respected

member of the diplomatic corps of the city. she wasn't i first posted to washington in 1991 and while in that position, of course, and later in 1995, she focused a great deal on u.s.-india trade relations. after that shield key positions in india government including the end of south asian cooperation. she was promoted to initial secretary in 2002 and was responsible for the united nations and national security policy. in 2005, she was named ambassador to germany. so i'm pleased to come along with her deep knowledge of our country here representing india to the united states and also very pleased that she will be started off today with some remarks. ambassador, welcome. [applause] >> thank you, mr. holt. there's a great pleasure for me to have this opportunity to talk to you at this conference.

i commend the initiative of the observer research foundation and the heritage foundation to organize this series of conferences and particularly this one, which will focus on indian globalization and the transformation of u.s.-india relations. those who have closely followed the remark of a successful visit of president obama to india less than a month ago would already be aware of the enormous ground the relationship is covered in recent years. prime minister manmohan singh and president obama, after their recent summit meeting in new delhi, characterized the u.s.-india strategic premiership as indispensable, not only for their two countries, but for

global stability and prosperity in the 21st century. our shared democratic values, the emerging international situation and their wide-ranging opportunities have guided our two countries in shaping this relationship. our core operation is broad-based and involve people on both sides from all walks of life. it draws strength from the enormous public goodwill and popular support that it enjoys in both countries. and of course, as mr. holt said, this is reflected in the bipartisan political support for strengthening the india u.s. relationship across both sides of the political aisle in the united states and across changes

in administration. into the broad political spectrum in india, again across changes in government. the world today is undergoing significant long-term changes, which will s newder this centu. the center of gravity of new opportunities and challenges is increasingly shifting towards asia and the remarkable transformation that india itself is undergoing is an important part of this. in the years after independence, india consolidated its democratic framework based on political and cultural pluralism, respect for fundamental freedom, the rule of law and the institutional checks

and balances of the free media and independent judiciary, which promotes and perfect participatory governance. this itself was an enormous achievement in a developing country, characterized by great diversity and facing huge challenges of mass poverty and social development. however, our economic achievements were more modest and there was growing realization that the late 80s that we needed to fundamentally reorient her economic policies, which were focused on self-reliance. the reforms of 1991 radically changed the paradigm of india's economic policies, deregulating the economy internally and liberalizing it externally.

the reforms are gradual as the political and social consensus was a democratic imperative. the economy has now taken off and was averaging a growth of 9% for four years before the global economic crisis. while growth tipped during 2008 to 6.7%, it has now rebounded and is project it to be 8.5% this year and 9% in 2011. india's growth in the first half of this fiscal year from april to september 2010 has been higher than it at 8.9%. our key national priority in the

years ahead is to sustain growth of 8% to 10% and to ensure it that this group isn't to say that benefits both sections of our people. sustained high growth will propel the indian economy into one of the three largest economies globally in the coming years. moreover, as india's growth is based largely on expansion of domestic demand and domestic investments, the indian economy would be an anchor at economic momentum and stability in the global economy. these changes have also altered the way india interacts with the world and the transformation in

our engagement with the united states is part of this process. we see the united states as a valuable partner in meeting our development aspirations, and building peace and security in our neighborhood and the wider asian region and in addressing shared global challenges. our cooperation has become more expensive, our dialogue more candid and wide-ranging. the canvas is fast, encompassing growing trade and economic ties, political and security consultations, cooperation in counterterrorism and defense and joint endeavors in the areas of energy, including nuclear energy and clean energy and initiatives

for promoting development issues, such as agriculture, education and health. while asia is transforming rapidly as it surges towards economic prosperity, there are new questions about coexistence, cooperation and competition across the asian region and how these play out will have far-reaching implications be for global peace and security. situated in the heart of asia, where east central and west asia needs, india has a vital stake in security, stability and prosperity in asia. this is something that we share with the united states and we have agreed to work together to

promote an open, balanced and inclusive architecture of cooperation in the asia-pacific region. looking closer to our neighborhood, we have shared a vital interests in stability in afghanistan and in reversal of the tide of islamic extremism, which threatens not only the security of afghanistan, but also peace and security in the broader region around afghanistan. we have agreed to work together to intensify consultations, coordination and cooperation with regard to afghanistan. and what is new is we will also be looking at development

projects, which we can undertake jointly in the areas of agriculture, women's empowerment and capacity building. india itself has committed $1.4 billion in development assistance to afghanistan and our assistance has helped to build infrastructure in afghanistan, whether it is electricity, transmission lines or hospitals or schools. it is hoped to build more grassroots projects at the local level, which return on the basis of local priorities in afghanistan and it is hoped in capacity building. we offer a very large number of scholarships and training

flights to afghanistan, including 300 agriculture because agriculture will be the key to turning around the prospects of the afghan economy and providing people there with viable alternatives to some of the more dubious economic act devotees, which currently are in many areas the means versus of national income. we've also provided duty-free access to afghan goods. in the indian market is one of the largest markets for afghan agricultural products, whether it be dried fruits from afghanistan or if the melons or watermelons from afghanistan, the indian market provides the ability for afghanistan to

productively export its produce. of course, we would be able to intensify what we could import if there was suitable land traffic to afghanistan. but the recent agreement, which was signed between afghanistan and pakistan on trade and transit does not include transit facilities for india. so when the long run, if we are looking at how we can stabilize this region and provide the kind of linkages and comic dignities, which will enable it to emerge as a stable unit, i think this would be a very important element that we would need to address and we hope that we can work together on these issues in

the future. of course we have agreed on very major initiatives during the president's visit. two of these were touched upon by mr. holtz. one is in the whole area of liberalization of the u.s. export control framework as it applies to india. maybe i should choose the word of liberalization, i should use the word realignment in some sense of the export control framework. but this is a significant step forward and carried to its logical conclusion the initiative of the civil nuclear agreement between india and the united states. because that had dealt with the issue, which had constrained the capacity of the two countries to realize the full potential of

their relationship. this initiative will enable much stronger cooperation between india and the united states in the whole field of tool use technologies. and this could emerge as a very important area of cooperation in the future. already today, the united states is the single largest source of tech knowledge he collaboration for indian companies. as indian companies expand, as they modernize, as they looked towards a global role, i think this aspect of the relationship will acquire increasing importance and new momentum facilitated by the framework, which has now been agreed upon. it has been broadly welcomed across the political spectrum in

india. i think the other major area, where we have agreed to cooperate is in the field of counterterrorism. this is a shared challenge. and as the attack yesterday showed the very large challenge we had the federalist attack in dubai, which, you know, which is something that greatly affect good the public discourse on the issue because it took terrorism -- the challenge of terrorism to an entirely new dimension. and we were appreciative of the cooperation that we had received from the united states in investigating the mumbai

terrorist attacks and following dubai, counterterrorism intensify. we were able to establish a new basis of trust and confidence, which has enabled us to intensify intelligence and information sharing into focus on capacity building and sharing of experiences. during the visit of president obama, we have agreed to have a new dialogue on homeland security. and this will focus on maritime security, more security and so on, including areas such as mega city policing, which would be important for india as it moves ahead in creating the capacity

to deal with the gravity of the challenge that we face. as the u.s. is also a federal country, with the same kind of framework -- well not the same, but similar framework, where you have to deal with the powers which are with the federal government and the powers. we have a similar framework in india and therefore as we move ahead, i think the u.s. experience in dealing with these issues will be very relevant and helpful to s. in creating the capacities in dealing with this challenge in the future. in the realm of security, we have also agreed to work together on efforts towards

non-proliferation. indeed, india is situated in what i would call an arc of nuclear proliferation. because if you see the region, whether it was not korea or pakistan or the earlier effort, which was aborted in libya, i mean, you will see that this region has been at the center of clandestine proliferation and much of it has radiated outward from our neighborhood. we have set up a new center of nuclear excellence for global partnerships. and we will also be the united states in this field. beyond proliferation, we have a shared vision of a world without nuclear weapons. for india, this has been an article of faith.

we have always believed that the world would be safer if there were no nuclear weapons, even as we have also held that as long as there are nuclear weapon and the world, including in our neighborhood, then each country, including india, would have to take the requisites for its own security. but of course, we have supported the non-proliferation framework, even though we've been outside the non-proliferation treaty itself. and we have never exported nuclear know-how or technology to any country. we have exported civilian technologies of the safeguards. and i was in recognition of india's impeccable record in this field, that we were able to build on this to have an

agreement for cooperation. so this is another area where we worked together. and in the field of security, we also look at the broader picture, where both countries share an interest in ensuring the safety of and access to what is called the global commons, the maritime -- maritime zones are leaps of commerce and trade, space, cyberspace. these are some of the areas where we really explore these to involve rules of the road and confidence building measures and make global level, which will provide for the stability of these important pathways, which

have become increasingly relevant for trade and commerce in the modern day world. in the economic field, the trade and economic relationship between india and the united states has grown, driven by the momentum in the indian economy and the increasing -- i would say, the increasing complementarity is between our two economies. i think this is an important fact here that needs to be understood, that the indian economy has followed a model, which is different to that of other economies in asia because it has not been an export model. india's levels of trade are modest, but growing rapidly,

trade with the united states is broadly balanced in both directions. indeed, between 2004 and 2008, overall and yet u.s. trade in goods doubled, but u.s. exports traveled during this period. and this was almost the fastest growing export region for the united states. in the services field, which again i think is perhaps not that well known. trade is broadly balanced. for the last year for which we have results, which is 2008, india exported $10.2 billion worth of services to the united states. and the united states exported -- sorry, the united states exported $10 million worth of services to india and

india exported $12 billion worth of services to the united states. so roughly 22 billion in terms of trade and services are broadly balanced. and again, this is growing in both directions. the u.s. exports financial services, consultant services, management services to india. india expert software and i.t. services largely to the united states. and of course in the field of investment, and again we are seeing that the relationship has become an increasingly two-way relationship. initially, u.s. fdi into india was one of the largest and it still continues to be one of the largest sources of direct investment in india and more so a portfolio investment because that is rebounded this year and

we've seen an increase in capital source to our stock market. what is new in recent years is that indian investments into the united states has increased considerably and in some years has tended to be more than u.s. fdi into india. indeed, according to mr. hormats, it is the second fastest growing fdi into the united states. between -- according to a study which was done for the federation of chambers of commerce and industry, indian direct investment into the united states has been between 2004 and 2009 has been in the region of $25 billion over $5.5 billion in the greenfield ventures and $20 billion in

mergers and acquisitions. now, this latter figure of $20 billion of mergers and acquisitions doesn't show in u.s. did it because that reflects the greenfield investment. but it shows that there is very significant investment for india, coming into the united states. and this is across a very diverse range of areas, including manufacturing, such as pharmaceuticals, automotive, and including information technology. so it's across a very biotechnology. is across a very broad range of site varies. and it is hoping to provide shared prosperity and to stimulate employment in the united states. and i think that is the

important thing about the india u.s. relationship, that it is not exposing mutual vulnerabilities, but that it is building towards shared prosperity in both countries. and this aspect of the relationship will become increasingly important as the indian economy grows, as there is a larger market and a bigger middle class with purchasing power. i think india will be one of the big growth markets for the future. and u.s. companies, looking to position themselves in the global economy would need to factor india into the global strategies if they are to make a significant impact. now, i think for india the challenge has been to broaden its basis the growth.

because initially it's been very much led by services, but for a country with the population as large as india, we need to also build the manufacturing sector and agricultural sector. we can't have an economy which balances on one leg because it will suddenly not be sufficient for the challenges that we face. and in this process of diversifying the economy, and building strength in manufacturing as well as in agriculture, the u.s. can be a very valuable partner. in recent years, we've seen that indian manufacturing and indian industry has restructured after facing initial difficulties when we opened up as some of our companies were critical of what had been done.

because we said, you know, you're forcing us to run before we learn to walk because there was a shelter of the economy. but the net result has been that they have been forced to restructure, to face the global competition. and today in these areas, whether it is automobiles, whether it is generics in the pharmaceutical field or it isn't heavy industries such as steel, cement, indian industry is increasingly gaining momentum. it has modernized. it is cost effective and it is becoming innovative. you know, initially the indian model was really to just buy take elegy from outside and then they would continue to use that technology for 40 years. you know that we were building the ambassador in the 50th.

and in the 80s, we were still building the same car. now, it's a good car and i have no objection to it. it has filled a whole photo album of egregious things, who is seen india through the lens of the window as an ambassador, but obviously this was a symbol of the fact that the indian economy with a seller's economy, not a buyer's economy. and this has changed. and with increasing competition is come the incentive to change. and you're seeing that india has become a global hub for low cost high tech manufacturing, you know, for areas such as automobiles for the nano car is probably the cheapest car in the world and has led to more than

30 people in car areas, which we accomplished at 16 the cost of similar munitions elsewhere. we have shown a new ability to innovate, to meet our circumstances because the challenges that we face in india are enormous. the market is growing, but it's a specific market with low per capita incomes, where price sensitivity is very high. and this is pushing companies to deliver low-cost high-tech goods, which are appropriate not only for the indian market, but then have global relevance in developing country markets elsewhere. and increasingly, i see that there are indian and u.s. companies who are collaborating

in these ventures. that's against an area that we think that the future holds great promise because technology partnerships between indian and u.s. companies could drive competitiveness and create markets for both countries and not only within india and the united states, but globally. this has been an important element in our economic relationship, that is that it has been knowledge and technology intention is. and it has been a symbiotic relationship, where we have not been competitors, but we've been complementary. and i think that this is an element, which will increase in the future if we are able to build on the synergies which are

so apparent in our economy is. and of course in agriculture, we need to have the next leap in agriculture productivity because the green revolution has plateaued. and while a large number of indians continue to reside in cultural areas, the share of agriculture and the tdp in india has been coming down. it's now in the region at 17 or 18%. but the share of the population is more than 60%. so how do we trigger this next leap in agriculture productivity? and i would come from really assimilating agribusinesses, by putting in place the capacities for full processing, logistics

and building forward and backward linkages between the agriculture and urban economies. now, if you look at which countries, you know, helped us with the first green revolution, it was the united states. the high yielding varieties of wheat fields, we see is introduced by duck or norman helped to change the face of indian agriculture and enable us to gain some sufficiency. we hope that through collaborative efforts, we can create a dynamic for this next leap in agricultural productivity. and finally, if you look at economic challenges, then infrastructure is a key challenge. it's well below where we require and it's estimated to shave off

almost 1%, if not more of gdp growth because of the constraints we face today. it is estimated that india would need about a trillion dollars in investments in infrastructure over the next five years. during the current five-year time period, $500 billion of investment has been projected as a requirement. and we have already, and the first more than two years of the plan, received investment of about $230 billion, about 70% has come from the public site dirt and 30% from the public dirt. as we move ahead, we would like to see that if we could increase the share of private sector investment in infrastructure, but even sustaining a 30% investment would be important. and you see that this is a shift

which is happening in sectors such as power, where there was no private or investment in the past because of difficulties. we are getting almost 50% of your investment in the capacities which are currently under execution. so the current addition to the powers that are, almost 50% of investment is coming from the dirt and that is the indian air. so we would hope that there would be greater participation by u.s. companies and the opportunities afforded by the expansion of infrastructure in india in the years to come, whether it be in airports, railways, energy or roads. in fact, u.s. businesses have

not been on active in the infrastructure there. and this would be really a long-term opportunity, which would help to provide a stimulus, not only to growth in india, but also to growth in the united states. indeed at the g20 meeting, prime minister mentioned that, you know, investment of capital is unable on term capital on building infrastructure in developing countries could be a useful outlet for his sublists capital and the developing countries, which is set to present go in and pulitzer and capital flows into developing countries that could be channelized into long-term investments in infrastructure, which would have benefits for both sides. in the field of development, we

have agreed to explore opportunities in education, in health and in agriculture. and again, these are key priorities for india. and we see the u.s. as a valuable partner in meeting our development aspirations in the steel. the opening up of education to education service providers, the compulsion to grow the infrastructure for higher education, school education and vocational training has led to a decision by the indian government to increase outlays on education from the current 9% to almost 19%. that's the kind of expansion that will go up a new range of

opportunities. indeed, i see education as the next great area for growth in u.s. ties and connections. i think an important element of the dialogue during president obama's visit was to focus on what india in the u.s. can do, not only bilaterally, but also globally. in this connection, we very much welcomed the support extended by the u.s. president for india's permanent membership in the reformed u.n. security council because while there is a growing realization that global challenges today require your the cooperation of emerging economies to the effect to, then there is a sense in india that

these countries have to be given a greater say in shaping the outcomes, whose decisions -- and shaping the decisions to sell they are expected to implement. and so, this has been very broadly welcomed in india. and of course, we note that it is something which will emerge only on the basis of creating the appropriate consensus in the united states for change, but we are encouraged by the fact that there is growing support within the united states. that within the united nations, for change in the existing structures to better reflect contemporary realities. we have also agreed to see what india and the united states can do together in areas such as agriculture, and africa, in

afghanistan. and this is a new element in the partnership that we are seeking to build. so as we go forward, i think india's own economic growth, its national priorities which focus on creating an environment, which facilitates our sustaining this economic momentum, our development aspirations, our shared values the united states, are increasingly convergent issues will provide a substantial basis for carrying a strategic ridership forward in this 21st century. thank you. [applause] >> thank you, ambassador. you never fail to amaze us with the breath of your knowledge as a very comprehensive look at the relationship. i apologize on behalf of

dr. holmes, for him in matter driver porting of june board meeting today and we have literally thousand of our biggest donors in town. so he got pulled away with an emergency now, the port needs you now. that keeps the lights on around here so we had to head out. on his behalf of the heritage foundation, we thank you very much. i hope to see you back again here soon. thank you. [applause] >> for those of you who don't know me, and director of the study center here at the heritage foundation.

>> are those that claim or want a search words, there is absolutely no ask for search warrant. there is a record of a search warrant >> now, a discussion on information technology and the new health care law. include health and human services secretary, kathleen sibelius and white house economic advisory, lawrence summers. this is an hour 15 minutes. [inaudible conversations] [inaudible conversations]

>> good morning, everyone. my date is david blumenthal, national coordination at the halted human services. want to welcome everyone from the public and the press as well as our distinguished panelists here today for a very important announcement about a new report on health information technology. but first, i would like to introduce an disagree pillage and pressure to introduce my boss, the secretary of health and human services, kathleen sebelius. throughout a unique and challenging and exciting time in the history of our health care system, secretary sebelius has provided steady rise and creative leadership on a wide range of issues that come before her, but most exceptionally on health care reform, reforming our health care system and also on an issue that my group, my agency is most concerned with a knot of information technology.

as the insurance commissioner and governor of kansas before coming here, she learned how to reach and guide consensus on highly contentious and important issues in the issues that we will be dealing with in the area of health information tech knowledge he certainly fit that description. so it is a great privilege to have her at the helm of the shift during these exciting times. director kathleen sebelius. [applause] >> well, good morning, everybody. and thank you, david, not only for your nice introduction, but for your incredible leadership of this important project. i just came from a discussion with the ceos of the business roundtable and i want to tell

everyone on this panel that a new report of realizing the full potential of health information technology is near and dear to their hearts. the first question i got asked was, how does this relate to the momentum underway for electronic health records and happily make sure that's on track as we implement the affordable care act. so this is being watched carefully across the country. i am glad that all of you are joining us today to talk about this important report, realizing the full potential of health information tech knowledge he ip cast. the president's council of advisors on science and technology. what you recognize the leaders who are here with us today, who deserve a lot of credit for pushing health i.t. to the top of the national agenda, where it needs to be. dr. eric lander is here,

cochair. and dr. christina cassel, who led the working group on health information tech knowledge he. it is nice to see chris again. she and i worked together in the 90s on various health issues. and i've kept track of her, but i don't get to see her play often enough. dr. david blumenthal, who is our brilliant entire list national coordinator for health information technology. and dr. larry summers who has helped guide our economy during some of the most difficult times in the nations history. and i also want to recognize at&t mobile health and kaiserñ permanente were also joining us today. these organizations have been real health i.t. partners and pioneers. so the report that pcast is releasing today helps reduce

paperwork, protect privacy and improve the quality of care. in industry after industry, we've seen a power of information technology bring down cost and improve customer experience. now, join me for just a moment and imagine going back to the days where you walked into a grocery store and the cashier was looking at handwritten price tags and punchy nose and were waiting for a bank to open ever? time you needed cash or pay in every bill a check. i don't think most americans would ever accept that. health care shouldn't be any different. and in fact, what we've seen in hospitals and doctors offices across the country is that when electronic health records are well designed and implemented correctly, they are a powerful force for reducing errors, low whirring cost and increasing both provider and patient

satisfaction. and i've had the opportunity in this role as secretary to visit with health care providers across the country. and they still haven't met a single doctor who says i really want to go back to those days where you had those great paper files. you know, that was really the way liked to practice medicine. and yet, when this administration came into office two years ago, just to intend that there's an one in 10 hospitals even use the basic electronic health record system. and that is because even with the benefits of the h.r.'s, there is a very daunting obstacles. it takes time to learn a new type allergy, especially if you're a talk or in a small part is without a health i.t. staff. there is a challenge of being able to share information securely with other providers if they have a different system. and then there's the fact that the systems can be expensive.

even if they pass in the long run, there is an upfront cost. and that's why as part of the recovery act, the president made a commitment to make an historic investment to eliminate some of those barriers. we're creating regional extension centers modeled on the old agriculture extension centers. the smaller providers and small hospitals can get hands-on technical support, setting up and running their own i.t. systems. ..8 y4çqyq;]çyç5