>> PRODUCTION FUNDING FOR, "THE FARMING PROJECT," HAS BEEN PROVIDED BY THE RURAL DEVELOPMENT ADMINISTRATION, ASSISTING EMERGING RURAL BUSINESSES IN AGRICULTURE AND OTHER INDUSTRIES.

>> IN ONE CHAIN, AND I WON'T MENTION IT, JUST IN OUR BACKYARD, IT'S $25,000 TO GET ONE THING ON THE SHELF.

>> WE'VE GOT OUR PRODUCT HERE THAT EVERYBODY "OOHS" AND "AAHS" ABOUT.

IT'S A MYSTERY WE CAN'T GET THE VERMONT SEAL OF QUALITY ON THIS.

>> ANY TIME THAT YOU THINK YOU'RE UP FRONT, THEN SOMEBODY'S ALREADY PAST YOU.

AND SO I THINK WE HAVE TO BE REALLY CAREFUL THAT WE DON'T KIND OF GIMMICK OURSELVES INTO THINKING THAT WE'RE NUMBER 1.

>> FAMILY FARMERS ARE STRUGGLING TO MAKE A LIVING.

WE AREN'T PRODUCING PET ROCKS AND MICROWAVES, THINGS WE CAN DO WITHOUT.

THIS IS FOOD WE ALL NEED.

>> FROM THE WEATHERSFIELD MEETING HOUSE IN WEATHERSFIELD CENTER, VERMONT, VERMONT E.T.V.

PRESENTS, "A TOWN MEETING ON MARKETS AND MARKETING OF AGRICULTURE."

HERE'S MODERATOR RON POWERS.

>> GREETINGS FM THE HISTORIC WEATHERSFIELD MEETING HOUSE HERE DEEP IN THE ROLLING WOODLANDS OF SOUTHEASTERN VERMONT WHERE WE A ABOUT TO BEGIN ANOTHER IN OUR SERIES OF TOWN MEETINGS ON THE TOPIC OF FARMING IN VERMONT.

I'M RON POWERS.

NOW, YOU MAY THINK THAT WITH THE ADVENT OF TECHNOLOGY AND COMPUTERS FARMERS MIGHT HAVE IT PRETTY EASY THESE DAYS.

THAT AFTER GETTING UP BEFORE BEFORE DAWN TO MILK THE HERD, MIX THE FEED, FIX THE MACHINES, REPAIR SOME FENCES, PLANT THE FIELDS, NURSE SOME SICK COWS, HAUL SOME BRUSH, FIGURE OUT THE FAMILY BUDGET, MEET THE PAYROLL AND MAYBE TAKE OUT A SECOND MORTGAGE ON THE BARN THEY CAN JUST KICK BACK AND TAKE THE REST OF THE DAY OFF.

WELL, IT'S NOT THAT EASY, NOT AT THE DAWN OF THE 21ST CENTURY BECAUSE TODAY'S FARMER, AFTER HE GETS THROUGH WITH ALL OF THAT OTHER STUFF, HAS TO BE A MARKETER AS WELL.

HE HAS TO UNDERSTAND MARKETING OR INCREASINGLY SHE HAS TO UNDERSTAND MARKETING, AND BY MARKETING I CERTAINLY DON'T MEAN CHECKING OUT THE DISCOUNT SPECIALS AT K-MART.

I MEAN FIGURING OUT HOW TO SET THE PRICE OF MILK AND HOW TO GET INTO SPECIALTY PRODUCTS, LIKE SALSA, HOW TO JOIN THE NEW EMERGING GLOBAL MARKET OF FARMING, HOW TO ADVANCE THE COMMERCIAL APPEAL OF SPECIALTY PRODUCTS, LIKE MAPLE SYRUP.

WHY SHOULD VERMONT FARMERS HAVE TO KNOW ABOUT MARKETING, WHY SHOULD YOU KNOW ABOUT IT, AND WHAT DO VERMONT FARMERS AND VERMONT CONSUMERS HAVE IN TERMS OF COMMON INTEREST AS THEY UNDERSTAND THE DEMANDS AND THE COMPLEXITIES OF MARKETING IN TODAY'S ECONOMY?

AS USUAL, WE HAVE ASSEMBLED AN EXPERT PANEL TO GET TO THE BOTTOM OF THIS WITH US.

I'M GOING TO INTRODUCE THEM IN A MOMENT.

I'M GOING TO SET THE GROUND RULES AS WE ALWAYS DO FOR THESE TOWN MEETINGS.

GOING TO HEAR THE PANEL IN A BRIEF RESPONSE TO OUR QUESTIONS, AND THEN YOU, THE AUDIENCE, HOPEFULLY WILL GET INVOLVED IN THIS TOWN MEETING WITH YOUR QUESTIONS AND YOUR COMMENTS, AND WE'LL MAKE IT AS GENERAL A CONVERSATION AS POSSIBLE.

NOW, LET'S MEET OUR PANEL.

JANET BAILEY OF BRATTLEBORO REPRESENTS THE VERMONT FEDERATION OF FARMERS MARKETS.

STEVEN JUDGE OF SHOREHAM IS GENERAL MANAGER OF VERMONT MILK PRODUCERS, A COOPERATIVE THAT PRODUCES PREMIUM MILK.

STEVE JUSTIS IS CHIEF AGRICULTURAL DEVELOPER FOR THE VERMONT DEPARTMENT OF AGRICULTURE.

ROBERTA MACDONALD IS MARKETING DIRECTOR FOR CABOT CREAMERY AND FOUNDING MEMBER OF MARKET VERMONT WHICH IS A STATE INTERAGENCY DEVOTED TO THE MARKETING AND PROMOTION OF VERMONT'S PRODUCTS AND ASSETS, AND HAS THE LONGEST INTRODUCTION ON THIS PANEL.

CHUCK ROSS IS DIRECTOR OF SENATOR PATRICK LEAHY'S VERMONT OFFICES.

SENATOR LEAHY, OF COURSE, CHAIRS THE U.S.

SENATE COMMITTEE FOR AGRICULTURE, NUTRITION AND FORESTRY.

AND, FINALLY, ROBERT WELLINGTON IS AN ECONOMIST FOR THE AGRI-MARK DAIRY COOPERATIVE.

PANEL, WELCOME.

AND, MR.

WELLINGTON, LET'S START WITH YOU.

I UNDERSTAND THAT THE PRICE THAT VERMONT FARMERS GET FOR THEIR MILK IS TIED TO A COMPLEX FORMULA INVOLVING PRICE OF DAIRY PRODUCTS IN MINNESOTA, WISCONSIN AND SOME OTHER MYSTERIOUS GOVERNMENT FORMULAS.

WITHOUT GETTING INTO ALL OF THE DEEP, GORY, FOOTNOTEY DETAILS, TELL US WHY THIS IS SO AND WHY CAN'T DAIRY FARMERS IN THIS STATE SET THEIR OWN PRICES.

>> OKAY.

THE BIGGEST PROBLEM WITH MILK IS THAT WE HAVE ABOUT 150,000 DAIRY FARMERS THROUGHOUT THE COUNTRY AND WE HAVE FEWER THAN SEVERAL THOUSAND PLANTS THAT PURCHASE THAT MILK.

SO IT'S REALLY THAT MARKETING STRENGTH.

U.S.D.A.

HAS DECIDED THAT THEY WOULD SET MILK PRICES EVENLY ACROSS THE COUNTRY.

ONE OF THE REASONS THEY HAVE DONE THAT IS BECAUSE VERMONT CHEESE MUST COMPETE WITH WISCONSIN CHEESE, OR CALIFORNIA CHEESE OR OTHER COMMODITIES.

NOW, WE ARE ABLE TO GET A HIGHER PRICE FOR OUR PACKAGED FLUID MILK, THE BOTTLED MILK THAT PEOPLE DRINK.

UNFORTUNATELY, THOSE PRICES WERE SET ABOUT 30, 40 YEARS AGO AND THE DIFFERENCE HAS NOT CHANGED IN THAT TIME PERIOD.

EVEN THOUGH THE COSTS TO FARMERS HAVE GONE UP, THERE HASN'T BEEN ANY REACTION ON THE PART OF THE GOVERNMENT.

>> STEVE JUDGE, ARE WE HEARING A FAIRLY ACCURATE APPRAISAL OF THE MILK PRICING SITUATION, THE SCENE FROM YOUR POINT OF VIEW?

>> WE'RE SEEING A FAIRLY ACCURATE PICTURE OF DAIRY PRICING FROM A CERTAIN PERSPECTIVE, AND THAT PERSPECTIVE IS THE GUARANTEED MARKET.

WHAT BOB WAS TALKING ABOUT WAS THE FLOOR PRICE FOR DAIRY PRODUCTS, NOT THE UPPER LEVEL.

WE CAN SET OUR OWN PRICE FOR MILK.

WE'VE DONE IT.

THE PRICE FOR THE FLUID MILK THAT WE SELL THROUGH OUR ORGANIZATION GOES FOR $7 MORE A HUNDRED WEIGHT THAN WHAT THE GUARANTEED MARKET IS.

THERE'S NO PROBLEM WITH THAT.

SO YOU'VE GOT TO DIFFERENTIATE WHEN YOU TALK ABOUT DAIRY PRICING WHETHER YOU'RE TALKING ABOUT THE GUARANTEED SUPPORT PRICE THAT THE GOVERNMENT HAS INSTALLED OR YOU'RE TALKING ABOUT MARKETING INITIATIVES THAT THE CONSUMERS MAY RESPOND TO.

>> MR.

WELLINGTON, AGRI-MARK IS A COOPERATIVE.

IT'S OWNED BY ITS FARMER MEMBERS.

WHY CAN'T THE CO-OP PAY ITS FARMERS MORE FOR MILK?

>> WELL, BECAUSE WE CAN PAY OUR FARMERS WHAT WE CAN GET OUT OF THE MARKETPLACE, AND WE HAVE TO COMPETE WITH OTHER COOPERATIVES, OTHER FARMERS.

WE REPRESENT A LARGE PORTION OF THE NEW ENGLAND MARKET, BUT WHEN WE LOOK AT NATIONAL MILK PRODUCTION, WE REPRESENT LESS THAN 1.5% OF NATIONAL MILK PRODUCTION.

>> FARM PRICES FELL GENERALLY IN 1991 IF I'M NOT MISTAKEN, IS THAT RIGHT?

>> RIGHT.

>> BUT THEY BARELY BUDGED IN THE DAIRY CASE.

WHAT WAS THE DIFFERENTIAL THERE, CAN ANYBODY HELP ME FIGURE THAT OUT?

NOT AS MUCH OF A DROP IN DAIRY FARMS, AS I UNDERSTAND IT, AS IN THE GENERAL FARM.

>> I CAN ADDRESS THAT.

THERE WAS A DROP, BUT IN THE MARKETPLACE THERE'S A TENDENCY THAT WHEN THE PRICES FALL TO FARMERS, THEY DON'T FALL IN THE MARKETPLACE.

USUALLY THE SUPERMARKETS AND THE PROCESSORS TRY TO INCREASE THEIR SHARE WHEN THAT HAPPENS.

HOWEVER, WHEN THE PRICE GOES UP TO FARMERS, THEY USUALLY TEND TO PASS ALONG THAT INCREASE RIGHT AWAY.

AND WITH THE AMOUNT OF INSTABILITY IN PRICES WE'VE HAD, WE'RE SEEING A RATCHETING EFFECT WHERE FARMERS ARE GETTING LESS AND LESS OF THE CONSUMER DOLLAR.

I THINK WHAT STEVE SAID IS THAT HIS GROUP IS REALLY GETTING MORE OF THAT CONSUMER DOLLAR, A THAT'S WHAT WE'RE TRYING TO DO WITH CABOT AND I THINK THAT'S SOME OF THE THINGS THAT FARMERS ARE GOING TO HAVE TO DO.

>> SVE JUDGE, TELLS NOW, TAKE US A LITTLE MORE DEEPLY INTO THE FACT THAT YOU AND UR FELLOWS IN THEOOPERATIVE HAVE GED TOREAKWAY FROM THIS PRICING, FROM THE FEDERAL DAIRY PRICING WORLD.

HOW DID YOU DO THAT?

TELL US BRIEFLY WHAT YOUR COOPERATIVE DOES AND WHY, AND WHETHER YOU, INDEED, DO SET YOUR OWN PRICE, WHICH I THINK YOU'VE INDICATED.

>> WELL, THERE'S NO BRIEF RESPONSE TO THAT, BUT WHAT WE'VE DONE IS WE FORMED AN INCORPORATED MARKETING ASSOCIATION OF DAIRY, AND THE FOCUS WAS ON BRINGING THE CONSUMERS DIRECTLY THE MILK FROM OUR FARMS THROUGH THE CURRENT MARKETING SYSTEM.

WE ESTABLISHED RELATIONSHIPS WITH THE CO-OPS, WE ESTABLISHED A RELATIONSHIP WITH A BOTTLER AND A DISTRIBUTOR AND INTERNALLY WE DESIGNED OUR PACKAGING, DESIGNED OUR PRODUCTS, SET OUR QUALITY STANDARDS AND SET THE PRICE, AND WE BASICALLY SUBCONTRACT SERVICES ALL THE WAY THROUGH THE SYSTEM.

SO WE PAY A HANDLER OR CO-OP TO HANDLE OUR MILK, PICK IT UP.

WE PAY A TRUCKER, WE PAY A BOTTLER PROCESSOR TO BOTTLE IT, WE PAY A DISTRIBUTOR TO DISTRIBUTE IT TO THE STORES THAT WE HAVE ACCESS TO, AND SINCE WE'VE SET THE PRICE, WE'RE ABLE TO CONTROL THE PRICING MECHANISM ALL THE WAY BACK THROUGH AND BRING THE FARMERS A SIGNIFICANTLY BETTER PRICE FOR THEIR MILK.

OUR FARMERS RECEIVE $1.50 MORE THAN WHAT THEY WOULD THROUGH THEIR GUARANTEED MARKET AS A FLOATING PRICE.

>> NOW, LET'S GET TO THIS MATTER OF CONSUMERS WHO ARE WILLING TO PAY MORE FOR QUALITY MILK.

WHO CAN ENLIGHTEN ME ON THAT?

>> REPEAT THE QUESTION.

>> YOU'RE OBVIOUSLY FINDING PEOPLE WHO WILL PAY MORE MONEY IF THEY CAN BE SURE THAT THE MILK THEY'RE GETTING IS TOP QUALITY, PRESUMABLY VERMONT PRODUCED.

>> WHAT WE'RE DOING IS APPEALING TO THE CONSUMERS WHO WANT A LOCALLY PRODUCED PRODUCT WITH CERTAIN PRODUCT GUARANTEES, AND WE'RE FINDING THAT CONSUMERS ARE RESPONDING TO IT MUCH LIKE THEY RESPONDED TO VERMONT COUNTRY MILK WHEN THAT WAS IN BUSINESS, WHERE THEY STILL RESPOND TO THE LOCAL DAIRIES THAT PACKAGE MILK IN GLASS, OR CARDBOARD OR WHATEVER THAT'S LOCATED THROUGHOUT NEW ENGLAND.

>> ONE OF THE PROBLEMS WITH THAT IS THAT I THINK THAT'S STILL A PRETTY SMALL NICHE MARKET.

IT NEEDS A LOT MORE GROWTH.

I THINK WE'RE TALKING ABOUT 10 OR 20 PRODUCERS AT THIS POINT IN STEVE'S GROUP.

AGRI-MARK IS A COOPERATIVE.

WE PICK UP ABOUT 50,000 POUNDS OF MILK EVERY 10 MINUTES IN OUR SYSTEM.

SO IT'S A TREMENDOUS VOLUME.

WE HAVE TO FIND A HOME FOR THAT.

SOMEONE'S GOT TO PAY THE HIGHEST PRICE POSSIBLE AND GET THAT TRUCK BACK ON THE ROAD TO PICK UP THE NEXT FARM THAT'S OUT THERE.

THAT'S PART OF THE PROBLEM IS THE TREMENDOUS VOLUME OF MILK THAT'S INVOLVED THAT HAS TO BE TURNED AROUND.

SO WE'VE GOT TO LOOK AT -- NICHE MARKETS I THINK ARE GOOD FOR SMALLER VOLUMES, HOPEFULLY IMPROVE THOSE.

WE'VE GOT TO LOOK AT OORTUNITIES, LIKE CABOT CHEESE, TO RETURN SOME OF THE CONSUMER DOLLAR BACK TO FARMER AND THEN WE'VE GOT TO IMPROVE OUR NEGOTIATING STRENGTH WITH OTHER PEOPLE THAT BUY OUR MILK.

>> HOW DO YOU DO THAT?

>> I THINK MORE CO-OPS TRYING TO WORK TOGETHER.

WE NEED TO DO MORE OF THAT.

WE DO THAT VERY WELL IN VERMONT.

FOR EXAMPLE, WE HAVE A GROUP CALLED GREEN MOUNTAIN FEDERATION, WHICH IS AGRI-MARK CO-OP, ST.

ALBANS CO-OP, EASTERN MILK PRODUCERS AND INDEPENDENT DAIRYMEN ASSOCIATION.

WE REPRESENT ABOUT 80% OF VERMONT FARMS, AND WE'RE JUST STARTING TO WORK TOGETHER VERY CLOSELY ON THESE THINGS AND SEE WHAT WE CAN INFLUENCE.

>> GOOD.

WE STARTED THE PROGRAM TONIGHT TALKING ABOUT THE FACT THAT VERMONT FARMERS HAVE TO BE, LEARN TO BE MARKETERS OF THEIR OWN PRODUCTS.

WE'RE GOING TO SEE A CLIP NOW FROM THE TESTIMONY OF ONE HAROLD GIARD, WHO'S A DAIRYMAN, WHO SAYS THAT DAIRY PRODUCTS HAVE TO BE PACKAGED AND MARKETED DIFFERENTLY TO ENCOURAGE VOLUME BUYING, AND THE FARMER HAS VERY LITTLE CONTROL OVER THIS SOMETIMES.

>> IF YOU GO IN A STORE, EVERYBODY KNOWS PACKAGING IN THE UNITED STATES OF AMERICA IS VERY, VERY IMPORTANT, HOW YOU PACKAGE THE PRODUCT.

NOTICE HOW MILK HAS ALWAYS BEEN PUT IN THE RED AND WHITE CARTONS.

FOR YEARS IT'S BEEN RED AND WHITE CARTONS OR IT'S IN WHITE PLASTIC JUGS, WHICH IS EXACTLY WHAT YOU DON'T WANT IT IN BECAUSE OF THE WAY THE LIGHT HITS THE PLASTIC AND IT CHANGES THE TASTE OF THE MILK AND SO ON.

WE'RE STILL PACKAGING IT LIKE THAT.

WE'RE ON A SYSTEM WHERE THEY WANT THE DAIRY FARMERS TO PUT MORE MILK INTO THE BULK TANK ONTO THE TRUCK, WHICH IS EXACTLY WHAT THE MARKET DOESN'T WANT, BUT WE'RE ON A SYSTEM THAT FORCES US TO DO THAT TO CASH FLOW OUR FARM BECAUSE OUR COSTS ARE GOING UP AND OUR PRICES ARE GOING DOWN, SO WE RUN EVEN FASTER.

TO BECOME MORE MARKET ORIENTED, YOU WOULD PUT MILK ON SALE, YOU WOULD PUT CHEESE ON SALE, YOU'D GO INTO THE GROCERY STORE AND YOU'D FIND TWO GALLON JUGS OF MILK HOOKED TOGETHER AND ON SALE SO THE CONSUMER BUYS MORE OF IT.

BUT YOU NEVER SEE THAT.

OR CHEESE THAT SELLS FOR $4.04 A POUND, YOU NEVER SEE TWO OR THREE TOGETHER BECAUSE THEY'RE TRYING A SPECIAL TO MOVE THE STUFF OFF THE SHELVES.

THAT DOESN'T HAPPEN FOR US.

SO HOW ARE WE SUPPOSED TO BECOME MARKET ORIENTED WHEN WE DON'T ACTUALLY HANDLE THE END PRODUCT?

WE DON'T HANDLE THE END PRODUCT.

SOMEBODY ELSE DOES THAT.

>> ROBERTA MACDONALD, ARE WE ASKING TOO MUCH OF VERMONT FARMERS TO BECOME EXPERTS IN MARKETING THEIR OWN PRODUCTS?

IS THIS A LEGITIMATE SET OF COMPLAINTS?

>> I DON'T KNOW WHERE THE GENTLEMAN SHIPS TO, BUT I CAN TELL YOU THAT THE PRIDE OF CABOT IS SOME OF OUR PACKAGING.

WHETHER IT'S THE HOLSTEIN WITH THE NEON CAP FOR WHIP CREAM, I MEAN, WE'LL USE ANY TECHNIQUE WE CAN.

BUT, IN FACT, WE HAVE BONUS PACKS.

THERE'S A LOT OF TWO-FOR-ONE PROMOTIONS.

THAT'S THE WAY THE GAME'S PLAYED.

>> BUT YOU'RE A BIG COMPANY.

YOU HAVE THE EXPERTISE.

>> BIG RELATIVE TO WHOM?

MAYBE STE.

>> BIG TO A FAMILY FARMER.

>> YEAH.

>> YOU WANT TO BRING OUT YOUR PACKAGES NOW AND SHOW US HOW YOU DO THIS?

>> CAN I?

>> PLEASE DO.

>> YOU SHOULD.

>> LIKE SESAME STREET.

TELL US ABOUT THOSE CARTONS, STEVE.

>> THIS IS OUR WHOLE MILK CARTON AND THIS IS OUR 1% CARTON, AND WE'LL BE COMING OUT WITH A SKIM MILK CARTON VERY SOON.

IT'S AN EXPENSIVE LITHOGRAPH CARTON.

THESE BASICALLY COST AROUND TWICE AS MUCH AS A NORMAL MILK CARTON DOES, BUT WE'VE FOUND THAT THE CONSUMERS HAVE BEEN VERY RESPONSIVE, AND THE PACKAGING HAS WORKED WELL FOR US.

WE PREFER CARDBOARD BECAUSE IT'S LIGHTER, IT'S SAFER, IT PROTECTS THE MILK FROM THE U.V.

LIGHT RAYS AND WE CAN TELL A LITTLE STORY ON IT.

YOU DON'T HAVE TO USE A LOT OF DETERGENTS AND HARSH CHEMICALS TO WASH THEM, AND IT DOESN'T COST AS MUCH TO TRANSPORT THEM DOWN THE ROAD IN THE DISTRIBUTION PROCESS.

>> BUT NOW AREN'T YOU SORT OF ENTERING THE WORLD OF ARTISTS, AND DESIGNERS AND ADVERTISING EXPERTS?

I MEAN, THIS IS A FAIRLY SOPHISTICATED CROWD OF PEOPLE YOU'RE DEALING WITH, ISN'T IT?

IT'S NOT THE KIND OF RESOURCES THAT EVERY VERMONT FARMER IS GOING TO HAVE ACCESS TO.

HOW DID YOU SEEK OUT, BY THE WAY, THE ARTISTS AND THE CONSULTANTS?

>> WELL, ACTUALLY, MY WIFE HAD A GREAT DEAL TO DO WITH THE DESIGN.

(APPLAUSE) >> IN SOME WAYS THERE IS A T OF SHISTICATION INVOED, BUT IT'S LOT OF JUST EFFORT AND HEART IN DOING WHAT YOU BELIEVE IN.

AND WE'VE HAD WHERE WE'VE MET STUMBLING BLOCKS, WE'VE SOUGHT OUT EXPERT ADVICE, AND WE ARE SMALL.

WE'RE TINY.

WE HAVE NO MONEY FOR MARKETING, NO MONEY FOR ADVERTISING.

WE RELY SOLELY ON WORD OF MOUTH, BUT THE BIGGEST COMPANY IN THE WORLD WAS SMALL AT ONE TIME.

AND WE'RE HOPEFUL THAT AT SOME POINT WE CAN MOVE THE MILK FROM 100 DAIRY FARMERS.

THAT'S OUR GOAL.

>> SO YOUR SECRET IS MARRY WELL.

>> YES.

>> MS.

BAILEY, YOU WANTED ADD TO THIS?

>> YEAH.

I'D JUST LIKE TO POINT OUT THAT I THINK THERE'S A REAL CRAVING IN THE GENERAL PUBLIC TO GET BACK TO OR TO BE CONNECTED WITH WHERE THEIR FOOD IS COMING FROM.

I THINK THAT'S WHERE THE STRENGTH OF FARMERS MARKETS IS.

WE DON'T SELL MILK USUALLY, BUT I'M JUST LOOKING AT THESE CARTONS.

AND THIS CARTON, IT TELLS A STORY, DOES SOME EDUCATING.

IF I WAS BUYING THIS CARTON OF MILK, I'D FEEL MUCH MORE CONNECTED TO THE FARMERS WHO WERE PRODUCING THE MILK IN THAT CARTON THAN I DO WITH A WHITE PLASTIC GALLON JUG.

>> RIGHT.

SO THERE IS SOME ADVANTAGE IN SPECIFICITY AND THAT CONNECTION TO THE COLORS AND THE ARCHAEOGRAPHY OF VERMONT.

THAT MAKES A DIFFERENCE.

MR.

ROSS?

>> YEAH.

I THINK WHAT WE'RE SEEING HERE TONIGHT AND WE'RE SEEING ACROSS THE STATE OF VERMONT IS WHAT VERMONTERS DO SO VERY WELL.

THEY'RE GREAT ENTREPRENEURS AND THEY'RE GREAT INNOVATORS, AND I THINK FARMERS IN THE STATE OF VERMONT HAVE A HISTORY OF SHOWING INNOVATION ON PRODUCTION AND COST MANAGEMENT, AND I NOW THINK WE'RE SEEING THE EVOLUTION OF VERMONT FARMERS AND VERMONT BUSINESS PEOPLE BEING INNOVATORS IN MARKETING.

I THINK YOU CAN LOOK ACROSS A SPECTRUM OF AGRICULTURAL PRODUCTS, AND WE'RE TALKING ABOUT MILK WITH MAPLE; YOU CAN LOOK AT CHEESE; YOU CAN LOOK AT APPLES; YOU CAN LOOK AT SMALL COMPANIES LIKE STEVE'S; YOU CAN LOOK AT BEN & JERRY'S; YOU CAN LOOK AT SHELBURNE FARMS, WHO RAISE THEIR OWN FARMHOUSE CHEDDAR CHEESE; AND TO CABOT.

I THINK WHAT WE NEED, THE TRICK HERE IS TO ENCOURAGE THAT KIND OF ENTREPRENEURIAL SPIRIT, ENCOURAGE THAT KIND OF INNOVATION, PROVIDE THE RESOURCES SO A STEVE JUDGE DOESN'T GET CAUGHT BY BEING UNDERCAPITALIZED AND NOT BEING ABLE TO MOVE FORWARD AND SUPPORT THAT UNIQUENESS.

WHEN WE LOOK AT VERMONT, VERMONT IS NOT A HUGE PLACE.

WE CAN MAKE A DIFFERENCE WITH THAT KIND OF INNOVATION IN THIS KIND OF STATE.

>> NOW, I'VE HEARD SEVERAL TIMES SINCE I'VE MOVED HERE 5 OR 6 YEARS AGO THAT THE VERMONT LABEL, THE VERMONT IMAGE STANDS FOR SOMETHING, NOT JUST IN THIS STATE BUT AROUND THE COUNTRY.

>> WE'VE DOCUMENTED IT.

>> HOW DID YOU DO THAT?

>> IN 1986 WE DID AN AWARENESS STUDY THROUGHOUT THE NORTHEAST DOCUMENTING WHAT IS THE VERMONT MYSTIQUE BASICALLY, AND THE PERCEPTION AMONG CONSUMERS THEN, WHICH IS NOT THAT LONG AGO, TRADITIONAL VALUES.

THEY COULD DEND ON THE QUALITY.

IT WAS SOMETHING THAT WE COULD THEN ENCOURAGE WITH DOCUMENTATION THAT PEOPLE SHOULD PUT VERMONT ON THEIR LABEL.

STOP SAYING IT'S THE X.Y.Z.

WOOD FURNITURE COMPANY.

START CALLING IT VERMONT WORKS.

>> MR.

JUSTIS, IS THE STATE OF VERMONT GOVERNMENT DOING ALL IT CAN BE DOING TO HELP IN THIS EFFORT?

ARE U SPENDING ENOUGH MONEY?

I'VE HEARD THAT YOU GUYS TAKE SOME HEAT SOMETIMES FROM VERMONT FARMERS WHO FEEL THAT YOU'RE NOT PERHAPS DOING AS MUCH AS YOU CAN.

>> I CERTAINLY WOULD AGREE THAT WE'RE NOT DOING ALL WE CAN.

I THINK WE HAVE A LOT OF RESOURCES.

WE'VE MADE A LOT OF PROGRESS, AND FOR A SMALL STATE I THINK WE'VE GOT QUITE A REPUTATION, AN ENVIABLE REPUTATION, BUT THERE ABSOLUTELY IS MORE THAT WE NEED TO DO.

>> BE SPECIFIC IF YOU CAN.

>> WELL, WE HAVE 8 PEOPLE ON OUR MARKETING STAFF.

WE WORK WITH EVERYONE FROM THE SMALLEST FARMERS MARKET TO COMMODITY EXPORTERS.

I THINK ONE OF THE THINGS IN THIS LAST FEW MINUTES OF DISCUSSION WAS THE IDEA THAT THE WHOLE MARKETPLACE IS VERY DYNAMIC.

ANY TIME THAT YOU THINK YOU'RE UP FRONT, THEN SOMEBODY'S ALREADY PAST YOU.

AND SO I THINK WE HAVE TO BE REALLY CAREFUL THAT WE DON'T KIND OF GIMMICK OURSELVES INTO THINKING THAT WE'RE NUMBER 1 BECAUSE THERE'S SOMEBODY THAT'S GOING TO BE TIGHT ON YOUR BACK TRYING TO DISPLACE YOU.

SO IT'S ALWAYS A MOVING GAME, AN EVOLUTIONARY GAME, AND ONE OF THE THINGS, BECAUSE VERMONT AGRICULTURE AND THE STATE ARE SO SMALL, THAT IT ALLOWS US TO MANEUVER THROUGH THE MARKETPLACE TO SOME EXTENT.

>> I WANT TO STAY ON THIS MATTER OF PRICING FOR JUST ANOTHER MINUTE.

ONE FURTHER ELEMENT TO THIS.

IF I'M NOT MISTAKEN, THE PRICE FARMERS ARE GETTING PAID FOR MILK HAS BEEN GOING DOWN, RIGHT?

WE'VE ESTABLISHED THAT?

PRICE OF MILK ON THE SHELVES HAS STAYED ABOUT THE SAME.

WHO'S PROFITING?

>> RETAILERS.

>> WHY?

IN WHAT WAY?

JUST TAKE US THROUGH THE MECHANICS OF IT.

>> THEY ABSORB THE MARGIN.

THE PROCESSORS AND THE DISTRIBUTORS ARE BEATING EACH OTHER TO DEATH IN THE DAIRY INDUSTRY TRYING TO OUT PRICE ONE ANOTHER.

THAT'S THE ONLY THING THAT DRIVES THE DAIRY MARKET RIGHT NOW IS PRICE UNLESS YOU HAVE A NICHE-QUALITY MARKET.

FLUID LK ESPECIALLY, THE DEALERS ARE OUT THERE BEATING EACH OTHER TO DEATH.

SO THE MARGIN, IF THE PRICE GOES UP IN MILK AND THE FARM PRICE GOES DOWN, GENERALLY THE DEALERS TAKE ADVANTAGE OF THAT TO REDUCE THE PRICE TO THE STORE AND THE STORE ABSORBS IT.

>> SO WHAT'S THE CORRECTIVE?

WHAT CAN WE DO ABOUT THIS?

>> PART OF THE REASON THAT THERE HAS TO BE SUCH HIGH MARGINS, I BELIEVE, ON THE RETAIL END IS THE VERY HUGE PRICE WE ALL PAY.

I MEAN, ALL OF US, MANUFACTURER, CONSUMER ALIKE, TO GAIN THAT SHELF SPACE.

IT'S CALLED SLOTTING FEES.

BEYOND THAT, TO BE ON ITS FEATURE IN YOUR STORE FLIER, YOU PAY MONEY TO BE ON FEATURE.

NOW, IT'S THE CASE THAT WHEN YOU'RE NEW AND INTERESTING, SOMETIMES THAT ISN'T CHARGED, BRIEFLY, VERY BRIEFLY, AND THEN ALL OF A SUDDEN IT COMES IN.

IN ONE CHAIN, AND I WON'T MENTION IT, JUST IN OUR BACKYARD, IT'S $25,000 TO GET ONE THING ON THE SHELF.

NOW, YOU CAN IMAGINE HOW MANY UNITS OF THAT X.Y.Z.

PRODUCT WE'VE GOT TO SELL TO MAKE UP THAT INVESTMENT.

SO IT'S THE COST OF DOING BUSINESS ANYMORE.

IT'S JUST PROHIBITIVE.

>> ARE WE TALKING ABOUT EXTORTION?

>> NO.

I THINK WE'RE TALKING ABOUT MARKET POWER.

>> YOU HAVE ACCESS TO THOSE CUSTOMERS.

IT'S DELIGHTFUL TO IMAGINE A FARM STAND WHERE I CAN GO AND GET MY VEGETABLES.

PUSH COMES TO SHOVE, I LIVE IN HARTFORD, THERE'S NO FARM LAND LEFT.

WHERE AM I GOING TO GO?

I'VE GOT TO GO INTO MY STORE.

THAT'S WHAT CALIFORNIA'S LIVING OFF OF AND SHIPPING IT HERE.

>> ROBERT, GO AHEAD PLEASE.

>> I THINK YOU'VE GOT TO LOOK AT THE MARKET POWER THAT THESE SUPERMARKETS HAVE.

PROBABLY 8 OR 10 SUPERMARKET CHAINS IN NEW ENGLAND SELL 90% OF THE GROCERIES, AND SO THEY CAN REALLY CALL THE SHOTS ON EVERYTHING.

>> AS SOON AS YOU'RE TALKING PRICING, YOU'RE TALKING POLITICS.

IT'S JUST ALL RELATED TO GOVERNMENT SUBSIDIES, THE CHEAP FOOD POLICY IN THE U.S., AND THAT'S OUR PROBLEM.

>> LET'S HEAR A LITTLE BIT MORE ABOUT THAT FROM MR.

ROSS.

MR.

ROSS, WE PATTED THE CONSUMER ON THE BACK A COUPLE MINUTES AGO BY SAYING HOW WILLING A LOT OF BUYERS ARE TO PAY MORE FOR VERMONT QUALITY PRODUCTS, BUT SENATOR LEAHY HAS TRIED WITH SOME SUCCESS TO BOOST THE PRICES FOR VERMONT FARMERS IN DAIRY PRODUCTS.

THAT PRICE BOOST OFTEN RESULTS IN A HIGHER SHELF PRICE.

NOW, WHAT DO YOU SAY TO THE CONSUMERS WHO SIMPLY WANT THE CHEAPEST FOOD THEY CAN GET AND DON'T GIVE A DARN WHERE IT COMES FROM?

HOW DO YOU CONVINCE PEOPLE THAT IT MAY BE WORTH TO PAY A FEW CENTS MORE FOR SOMETHING PRODUCED IN VERMONT?

>> I THINK FOR VERMONTERS AND FOR VERMONT PRODUCTS I THINK REALLY THE ISSUE, IF YOU WANT TO CONVINCE CONSUMERS TO PAY THAT HIGHER PRICE AND APPRECIATE IT, YOU HAVE TO RELY ON THE CONNECTION TO COMMUNITY, THE CONNECTION TO WHERE THE FOOD COMES FROM AND CONNECTION TO QUALITY.

I ALSO THINK WHEN YOU TALK ABOUT CHEAP FOOD, IT'S AN INTERESTING SITUATION.

THE UNITED STATES HAS SPENT DECADES PROMOTING CHEAP FOOD, AND WE'VE ACTUALLY SPENT MILLIONS UPON BILLIONS OF DOLLARS SUBSIDIZING THAT EFFORT.

I WOULD SUGGEST THAT WHEN YOU LOOK ACROSS THE UNITED STATES AND LOOK AT WHAT PRODUCTS ARE SUBSIDIZED, THAT IF YOU WERE TO REMOVE THOSE SUBSIDIES, THE VERMONT PRODUCTS WOULD BE MUCH MORE COMPETITIVE ON A NATIONAL BASIS.

>> I WANT TO TALK ABOUT LITERACY.

I WANT TO TALK ABOUT THE PROBLEM WITH PEOPLE NOT READING AND I WANT TO TALK ABOUT THE FEDS NOW HAVING NUTRITIONAL LABELING WHERE THEY'RE GOING TO LET US KNOW REALLY WHAT IS NOT IN OUR FOOD EFFECTIVELY.

MOST PEOPLE DON'T CARE.

THEY FEED THEIR CHILDREN POORLY, THEY FEED THEMSELVES POORLY.

ALL THAT NICHE, ALL THAT INTELLIGENCE OF EATING GOOD, HEALTHY THINGS.

WE KNOW WE CAN PREVENT CANCER IF WE EAT THE RIGHT VEGETABLES, RIGHT?

DOES THAT MAKE A DIFFERENCE?

PEPSI SALES, CHIP SALES ARE CLIMBING.

>> STEVE JUDGE?

>> LET ME JUST OUTLINE A COUPLE OF THINGS.

WE'VE GOT OUR PRODUCT HERE THAT EVERYBODY "OOHS" AND "AAHS" ABOUT.

IT'S A MYSTERY WE CAN'T GET THE VERMONT SEAL OF QUALITY ON THIS.

NOW, WE CAN'T, ACCORDING TO THE F.D.A., CALL THIS MILK PREMIUM.

WE CAN'T STATE ON THIS CARTON THAT THE MILK IN THIS CARTON COMES FROM COWS THAT HAVE NOT BEEN TREATED WITH B.S.T.

THE INFORMATION HAS TO BE VERY CLEAR.

WE CAN'T SAY THAT THIS PRODUCT IS 96.5% FAT FREE.

WE CAN'T SAY THAT OUR 1% IS 99% FAT FREE.

THOSE ARE STRUCTURAL PROBLEMS WHICH ARE IN PLACE TO CREATE THE IMAGE THAT ALL MILK IS THE SAME SO THAT MILK CAN BE MOVED FROM STATE, TO STATE, TO STATE, TO STATE, FROM MAINE TO MASSACHUSETTS, FROM NEW YORK TO MASSACHUSETTS WITHOUT THE MILK HAVING ANY REGIONAL IDENTITY OR THE CONSUMER DEVELOPING ANY ATTACHMENT TO THE FARM.

>> ONE OF THE QUESTIONS THAT YOU HAD ASKED ABOUT, DO CONSUMERS VALUE THEIR FOOD, AND I THINK THEY DO VALUE THEIR FOOD, BUT THEY TAKE IT FOR GRANTED THAT IT'S ALWAYS GOING TO BE THERE, AND SO THEY HAVE NO APPRECIATION FOR WHAT'S INVOLVED IN MANUFACTURING THIS FOOD.

I THINK ONE OF THE BIGGEST PROBLEMS WE HAVE IS THAT CONSUMERS IN THIS COUNTRY HAVE NEVER GONE HUNGRY.

IF YOU LOOK AT WHAT THE EUROPEANS DO FOR THEIR FARMERS, THEY VALUE THEIR FARMERS TREMENDOUSLY.

THEY MAKE SURE THEY GET A FAIR RETURN, BUT PART OF THE REASON THEY HAVE IS BECAUSE THEY WENT THROUGH TWO WORLD WARS WHERE THEY DIDN'T HAVE FOOD.

NOT THAT I'M SAYING THAT THE ANSWER SHOULD BE SHORTAGES, BUT I CAN GUARANTEE YOU THAT IF WE HAD SHORTAGES FOR ANY PERIOD OF TIME, THERE WOULD BE A DIFFERENT FOOD POLICY.

>> ALL RIGHT.

LET'S SWITCH TO A SLIGHTLY DIFFERENT TOPIC.

LET'S GET INTO THE AREA OF EXPANDING MARKETS, EXPANDING ECONOMIC BENEFITS.

WE'RE GOING TO HEAR FROM AN ECONOMIST NAMED JEFF CARR WHO'S GOING TO TALK TO US ABOUT THE EXPANSION OF MARKETS AND ECONOMIC ADVANTAGES OF SELLING VERMONT AGRICULTURAL PRODUCTS AS FAR AS HAVING A FAR-REACHING EFFECT ON THE NUMBER OF INDUSTRIES AND THE NUMBER OF PEOPLE IT ECONOMICALLY AFFECTS.

>> ONE OF THE DISTINGUISHING CHARACTERISTICS OF VERMONT AGRICULTURE THAT'S DEVELOPED PERHAPS OVER THE LAST 10 TO 20 YEARS IS THE FACT THAT WE'VE CULTIVATED AND GROWN MARKETS OUTSIDE OF THE STATE OF VERMONT, EXPANDED THEM TO SEVERAL PARTS OF THE UNITED STATES AND EVEN OUTSIDE THE UNITED STATES.

AND THIS IS IMPORTANT BECAUSE WHAT IT DOES IS IT MEANS THAT THE BENEFITS OF VERMONT FOOD AND AGRICULTURAL PRODUCTS PRODUCTION ARE SHARED WITH MARKETS ALL OVER THE COUNTRY, WHICH BRINGS DOLLARS BACK TO THE VERMONT ECONOMY, BRINGS IT BACK TO THE FARMER, BRINGS IT BACK TO THE TRANSPORTATION COMPANIES, BRINGS IT BACK TO THE PROCESSORS, AND THAT HELPS TO CREATE JOBS FOR VERMONTERS NOT ONLY ON THE FARM BUT IN MANY OTHER INDUSTRIES THROUGHOUT THE VERMONT ECONOMY, BE IT FOOD PROCESSING OR OTHER SUPPORTING SECTORS, LIKE TRUCK DRIVERS IN THE TRANSPORTATION INDUSTRY TO BRING THE PRODUCT INPUTS ONTO THE FARM AND TAKE THE PRODUCTS AWAY.

>> IS THIS A VALID THING TOOPE FOR, MR.

ROSS?

>> ABSOLUTELY.

I THINK IF YOU WERE GOING TO TRY TO SUPPORT VERMONT AGRICULTURE BASED UPON VERMONT'S POPULATION, WE'D SEE A DRASTIC SHRINKAGE FROM WHAT WE HAVE NOW.

SO THERE'S NO QUESTION WE'VE GOT TO GO IN THAT DIRECTION, AND THERE'S WAYS TO DO IT.

FROM MY POSITION WITH SENATOR LEAHY, WE'RE LOOKING AT WAYS TO BRING RURAL DEVELOPMENT DOLLARS TO VERMONT TO SUPPORT SMALL BUSINESSES SO THEY HAVE THE CAPITAL THAT'S AVAILABLE SO THEY CAN INNOVATE, SO THEY CAN INVEST.

A NEW MARKET OR A NEW WAY TO SUPPORT A MARKET, WE'VE REWRITTEN THE PROGRAM, "WOMEN, INFANTS AND CHILDREN," TO PROVIDE VOUCHERS SO THEY CAN GO TO A LOCAL FARMERS MARKET AND BUY FRESH PRODUCE THAT'S RAISED LOCALLY IN THE STATE OF VERMONT.

THAT'S A WHOLE NEW MARKET AREA THAT HAS NEVER BEEN THERE BEFORE FOR VERMONT PRODUCTS.

>> MR.

JUSTIS, WHAT OTHER PRODUCTS CAN WE BE PUSHING AND PROMOTING BESIDES THE DAIRY FARM?

>> WELL, FOR PROBABLY THE LAST 10 YEARS WE'VE BEEN EXPORTING GENERALLY ABOUT 20% OF OUR APPLE CROP TO THE UNITED KINGDOM, ENGLAND, SCOTLAND, NORTHERN IRELAND.

JUST WITHIN THE LAST SEVERAL YEARS WE'VE MADE QUITE A SUBSTAIAL EXPANSION INTO THE CALIFORNIA MARKET WITH MAPLE SYRUP.

I THINK PROBABLY A LOT OF PEOPLE DON'T KNOW THAT WE SHIP LIVESTOCK, PRIMARILY CATTLE; WE EXPORT BOVINE GENETICS; FROZEN EMBRYOS; THINGS LIKE THAT AND, OF COURSE, OUR VALUE ADDED OR OUR SPECIALTY FOODS MARKETS ARE EXPANDING.

>> LET'S TALK ABOUT THE SPECIALTY FOODS A LITTLE BIT.

IT'S AN INTERESTING EXPANSION.

YOU WALK INTO A STORE AND YOU DO SEE VERY COLORFUL LABELS WITH PRODUCTS AND FOODS THAT YOU NEVER WOULD HAVE ASSOCIATED WITH VERMONT.

I THINK OF SALSA, BARBECUE SAUCE.

AT THE SAME TIME THERE HAS BEEN SOME CRITICISM THAT THE SPECIALTY FOOD GROWTH AREA HAS NOT PRODUCED A LOT OF NEW JOBS AND THAT THEY ARE USING PRODUCTS AND INGREDIENTS THAT DON'T COME FROM VERMONT.

HOW DO YOU ANSWER THOSE CHARGES, MR.

JUSTIS?

>> WELL, IT IS TRUE THAT SOME OF THE SPECIALTY FOODS OR VALUE-ADDED FOODS THAT ARE PRODUCED IN VERMONT MAY NOT HAVE ALL OF THEIR INGREDIENTS OR EVEN PART OF THEIR INGREDIENTS PRODUCED IN VERMONT, BUT WE ALSO LOOK AT SPECIALTY FOODS AS A BANNER OR AS A FLAGSHIP FOR VERMONT TO CARRY.

IF YOU SEND A RAW COMMODITY TO CALIFORNIA, THEN NOBODY CAN TELL IF IT'S VERMONT OR CALIFORNIA.

>> STEVE JUDGE?

>> I JUST WANT TO BRIEFLY GO BACK TO THE DAIRY ISSUE HERE BECAUSE SPECIALTY FOODS AFFECT THE DAIRY INDUSTRY IN AN UNUSUAL WAY.

THE MORE MILK THAT GOES FOR MANUFACTURED GOODS, THAT DEPRESSES THE PRICE PAID TO THE DAIRY FARMER DUE TO THE GOVERNMENT SUBSIDY PROGRAM.

SO CHEESE DOESN'T DO ANYTHING FOR THE DAIRY FARMER.

IT REDUCES THE PRICE, IT INCREASES OVERALL UTILIZATION.

>> WE HAVE A QUESTION FROM THE AUDIENCE ON THIS SUBJECT, I THINK.

PLEASE IDENTIFY YOURSELF.

>> MY NAME IS SUZANNE LONG.

I'M A VEGETABLE GROWER IN SOUTH ROYALTON.

JUST TO ADDRESS THE QUESTION ABOUT DOES VERMONT SPECIALTY FOODS HELP FARMERS WITHIN THE STATE.

FROM WHAT I KNOW, A LOT OF THE SPECIALTY FOODS DON'T USE VEGETABLES PRODUCED IN STATE.

I KNOW THE NATURAL ORGANIC FARMERS ASSOCIATION AND SOME OTHER FARMING ASSOCIATIONS ARE TRYING TO HEAD IN THAT DIRECTION, BUT AT THIS POINT IT'S NOT USING THAT MUCH LOCAL PRODUCE.

>> I THINK WE'VE GOT SOME SEVERE PROBLEMS, THOUGH, IF WE SAY JUST BUY LOCALLY BECAUSE IF VERMONT SAYS THAT, THEN WHAT IF MASSACHUSETTS WERE TO SAY THAT, OR CONNECTICUT?

WHEREAS, WE WANT TO MOVE OUR PRODUCTS INTO THOSE STATES OR WE WANT TO SELL APPLES IN THE UNITED KINGDOM OR OTHER PLACES.

SO I THINK WE'VE GOT TO LOOK AT THOSE ITEMS CLOSELY.

I THINK THAT WE'VE GOT TO SAY BUY QUALITY IS PROBABLY IMPORTANT.

WE'VE GOT TO ASSOCIATE VERMONT WITH QUALITY, WHETHER YOU'RE BUYING IT IN VERMONT OR WHETHER YOUR A BUYING IT IN ANOTHER STATE.

>> DOES THIS BRING US BACK TO WHAT MS.

MACDONALD CALLED THE QUESTION OF LITERACY A FEW MINUTES AGO?

WE DID START OUT THE PROGRAM TALKING ABOUT THE NEED FOR NOT ONLY FARMERS TO UNDERSTAND MARKETING BUT VERMONT CONSUMERS AS WELL, AND LET'S FOCUS IN ON HOW GOOD A JOB WE ARE DOING, WE BEING WHO, THE GOVERNMENT, THE MEDIA, THE FARMERS THEMSELVES, ABOUT REALLY MAKING IT CLEAR TO OUR FELLOW CITIZENS IN VERMONT WHAT THE STAKES ARE FOR SUPPORTING VERMONT AGCULTURE.

STEVE JUDGE, DO YOU HAVE A RESPONSE TO THAT?

>> I THINK THAT THERE IS A PROBLEM WITH LITERACY IN THE CONSUMER, BUT I THINK THE GREATER PROBLEM IS LITACY IN THE PEOPLE WHO REGULATE AGRICULTURE D WHO SPEND LOTS OF MONEY PROMOTING IT.

I THINK JUST BRIEFLY TALKING ABOUT PROCESSING FACILITIES, VEGETABLE PROCESSING FACILITIES, LARGE-SCALE ONES, HAVE A TENDENCY TO DEPRESS PRICES PAID TO LOCAL FARMERS WHERE THE PROCESSING FACILITY GOES IN.

THERE'S A BIG WORLD OF ECONOMICS, AND MOVEMENT OF FOODS AND ECONOMICS OF SCALE, AND I THINK WE HAVE TO BE REAL CAREFUL WHEN WE TALK ABOUT THE GOVERNMENT OR ANYBODY COMING IN AND STRUCTURING THINGS TO BENEFIT FARMERS.

WHAT WE NEED TO DO IS LET THE FARMERS HAVE THE FREEDOM TO MARKET THEIR OWN GOODS AND HAVE THE GOVERNMENT GET OUT OF THE WAY.

>> WHO BUYS MORE OF YOUR MILK, STEVE JUDGE, IN-STATERS OR OUT-OF-STATERS?

>> MOST OF MY MILK NOW GOES TO A CHEESE MANUFACTURER WHICH IS SHIPPED NATIONALLY.

>> BUTUBTRACTING THAT, THE MILK THAT IS REALLY CONSUMED IN CARTONS, IN-STARS, T-OF-SRS?

>> ABOUT AHIRDF IT IS SOLD IN VERMONT.

>> AND THE RT GOESUT OF STATE?

>> T REST DISTRUTED THROUGUT NEWNGLAND D NEW JERSEY.

>> MR.

ROSS, I WANT TO ASK YOU WHAT I'M AFRAID WILL INEVITABLY BE A LOADED QUESTION.

AND IF WE CAN GET BEYOND THE STEREOTYPES FOR A MINUTE BECAUSE THIS REALLY IS IMPORTANT.

BUT I THINK WE CAN ASSUME THAT THE SENATOR IS, IN FACT, AND TRIES TO BE A FRIEND OF THE VERMONT FARMER.

HOW MANY FRIENDS DO FARMERS HAVE INSIDE THE BELTWAY?

HOW MANY SENATORS, CONGRESSMEN UNDERSTAND OR TRY TO UNDERSTAND THE PLIGHT OF THE FARMER?

ARE WE EXAGGERATING THE HOSTILITY TOWARD FARMERS IN WASHINGTON OR IS THERE SOME REAL BASIS FOR THIS?

>> I THINK WHEN YOU ASK THAT QUESTION, I CAN'T GIVE YOU SPECIFIC NUMBERS, BUT YOU CAN LOOK AT THE DECLINING INFLUENCE IN AGRICULTURE IN THE U.S.

GOVERNMENT AND STATE GOVERNMENT THAT WE'VE WATCHED FOR DECADES AND AS THE NUMBERS OF PRODUCERS, OF FARMERS WHO ARE ACTUALLY OUT THERE HANDS IN THE SOIL, RIDING THE TRACTOR, WORKING THE ANIMALS HAVE DECLINED, SO HAS THE INFLUENCE OF AGRICULTURE IN THE BELTWAY.

AS THE AGRICULTURE COMMUNITY HAS DECLINED NATIONWIDE, AS WE'VE FOCUSED MORE ON LARGE-SCALE FARMING WHERE YOU HAVE FEWER VOICES SPEAKING FOR THE INDIVIDUAL FAMILY FARMER, THAT VOICE HAS DECLINED.

THERE'S NO QUESTION ABOUT IT.

>> THE CHEAP MILK POLICY IS NOT THERE BY ACCIDENT.

IT'S NOT THERE TO BENEFIT THE CONSUMER, IT'S NOT THERE TO BENEFIT THE FARMER.

IT'S THERE TO BENEFIT THE PEOPLE WHO BUY THE MILK FROM THE FARMER.

IT'S A STRUCTURE THAT IS THERE ON PURPOSE SO THAT THE MANUFACTURES WHO MAKE ICE CREAM, YOGURT, FLUID MILK, BUTTER, CHEESE, HAVE A STABLE SUPPLY OF LOW COST RAW MATERIAL TO MANUFACTURE THEIR PRODUCTS WITH THAT OFFERS A GOOD MARGIN WHEN POSSIBLE THAT'S ALWAYS IN A SEMI-STATE OF SURPLUS SO THAT THEY NEVER HAVE TO WORRY ABOUT SHORTAGES.

THAT'S ON PURPOSE.

>> IS THAT A FAIR ASSERTION, MR.

JUSTIS?

>> YEAH, THERE'S QUITE A LOT OF MERIT TO WHAT STEVE MENTIONED.

I THINK THERE WAS AN EXAMPLE JUST MAYBE A YEAR OR SO AGO WHEN SENATOR LEAHY, I THINK IT WAS, WAS TRYING TO GET SOME SUPPORT FOR THE MILK PRICES, BUT THE REPRESENTATIVES IN CONGRESS THAT WERE IN NEW YORK CITY SAID, "IF YOU INCREASE THE PRICE OF MILK, THEN MY CONSTITUENTS, THE PEOPLE THAT VOTE FOR ME IN NEW YORK CITY, ARE GOING TO NOT BE ABLE TO AFFORD MILK," AND THEY'RE TALKING ABOUT LOW INCOME PEOPLE.

AND AS WAS POINTED OUT EARLIER, THERE'S A LOT MORE URBAN REPRESENTATION IN CONGRESS THAN THERE IS THE RURAL REPRESENTATION.

AND I THINK A LOT OF IT IS THE EDUCATION, BUT I WOULD VENTURE TO SAY THAT A LOT OF VERMONT FARMERS, PARTICULARLY DAIRY FARMERS, THAT IF IT WASN'T FOR CAPITAL DEPRECIATION, THEY WOULD BE ON FOOD STAMPS.

>> LET'S GO AGAIN TO THE AUDIENCE.

PLEASE IDENTIFY YOURSELF AND GIVE US YOUR QUESTION.

>> MY NAME IS SABINE RHYNE, AND I'M FROM A COOPERATIVE NATURAL FOOD AND ORGANIC PRODUCE DISTRIBUTOR IN BRATTLEBORO, VERMONT, AND I JUST WANT TO GO BACK TO THE ISSUE OF WHAT I THINK IS UNDERMINING THE CONSUMER.

I THINK THAT, IN FACT, WE'RE SEEING SOME TRENDS IN CONSUMERS THAT ARE REALLY YEARNING FOR THE QUALITY FOOD THAT WAS MENTIONED EARLIER, THE HEALTHIER FOOD; THAT, IN FACT, THE LARGEST GROWTH SEGMENT IN FOOD RIGHT NOW IS NATURAL FOODS, IS ORGANICALLY PROCESSED FOOD.

PEOPLE ARE A LITTLE BIT WORRIED ABOUT THE FOOD SAFETY ISSUE.

IT'S COMING UP MORE AND MORE IN ISSUES AROUND THE BOVINE GROWTH HORMONE, AND AROUND THE PESTICIDES IN CHILDREN'S FOOD, AND SO ON AND SO FORTH.

AND I JUST WANT TO GO BACK TO THE ISSUE OF PERHAPS CAPITALIZING ON AN OPPORTUNITY FOR VERMONT FARMERS AND VERMONT PRODUCERS, JUST AS STEVE ALLUDED TO EARLIER AND JANET, IN TERMS OF PEOPLE TRYING TO GET TO THE SOURCE OF THE FOOD EVEN IN URBAN MARKETS THAT WE REALLY NEED TO PAY ATTENTION TO.

I THINK WE'RE UNDERSELLING THE CONSUMER A LITTLE BIT.

>> JANET BAILEY, DO YOU HAVE A RESPONSE?

IS IT A FAIR ASSESSMENT, UNDERSELLING THE CONSUMER?

>> YEAH.

THERE IS A LOT OF INTEREST, AND THERE'S A LOT OF DEMAND THAT I KNOW THAT WE CAN'T MEET AT THE BRATTLEBORO MARKET FOR INSTANCE.

THERE'S PEOPLE CRAVING MEAT THAT'S GROWN WHERE THEY CAN TRUST IT.

THERE'S A LOT MORE DEMAND THAN WE CAN MEET, AND I THINK THERE'S A LOT OF ROOM FOR GROWTH IN DIVERSITY OF AGRICULTURE.

AND IF THEY'RE PRODUCING TOO MUCH MILK, WHY DON'T WE DIVERSIFY AND PRODUCE SOME OTHER THINGS?

>> WHY DON'T WE DIVERSIFY, ROBERTA?

>> NATURAL FOODS, CONSUMPTION LOCALLY, THOSE ARE FRACTIONAL, SINGLE-DIGIT PERCENTAGES OF THE TOTAL FOOD CONSUMPTION AND THE WAY IT'S SOLD.

IT'S LIKE TRYING TO RESHIFT THE QUEEN MARY.

>> JANET BAILEY?

>> QUICK COMMENT.

STEVE JUST CORRECTED ME.

HE SAID, "WE'RE NOT PRODUCING TOO MUCH MILK.

WE'RE BRINGING TOO MUCH MILK IN."

>> WHAT'S THE DIFFERENCE?

DO YOU WANT TO ELABORATE ON THAT, STEVE?

>> YEAH.

IT'S EASY.

NEW ENGLAND IS BASICALLY AT A BREAK-EVEN POINT.

WE DON'T PRODUCE ALL THAT MUCH MORE THAN WHAT WE COULD CONSUME, BUT WHAT WE'RE DOING IS GOING OUT TO NEW YORK STATE AND BRINGING MORE AND MORE PRODUCERS IN, BRINGING IT INTO THIS ORDER, AND WE'RE COMING UP AGAINST CHRONIC OVERSUPPLY IN NEW ENGLAND.

>> ROBERT WELLINGTON?

>> YOU CAN'T BUILD A WALL UP IN NEW ENGLAND.

WE'VE TRIED TO DO THAT IN OTHER WAYS.

WE'VE TRIED TO DO THAT WITH MILK PRICING, MANY OTHER FACTORS WHERE WE'VE TRIED TO SAY, "GEE, LET'S TRY TO STOP SOME PRODUCTS FROM COMING IN."

WE CAN'T DO THAT.

I THINK WE'VE GOT TO MARKET OUR PRODUCT AND MARKET ON AN EVEN LEVEL WITH EVERYBODY ELSE.

WE'VE DONE THAT WITH VERMONT'S IMAGE, BUT I DON'T THINK THAT WE CAN SAY THAT WE DON'T PRODUCE TOO MUCH MILK HERE, THE PROBLEM IS IN ANOTHER STATE.

WE'RE A COUNTRY AND WE HAVE TO STAND TOGETHER, AND CONGRESS IS NOT GOING TO LET US STAND ALONE.

>> BACK TO THE AUDIENCE.

YOUR QUESTION?

IDENTIFY YOURSELF.

>> MY NAME'S JOHN MALCOLM.

I'M A DAIRY FARMER IN PAWLET, VERMONT, ON THE OTHER SIDE OF THE STATE, AND I THINK THE POINT SHOULD BE MADE IS THAT AS A DIRECTOR AND A MEMBER OF AGRI-MARK, WE'VE JUST INVESTED OVER $50 MILLION IN PROCESSING FACILITIES IN THE STATE WITH OUR MERGER WITH CABOT AND NOW WITH OUR $10 MILLION PURCHASE OF THE KRAFT CHEESE PLANT IN MIDDLEBURY, THAT I THINK THE PROCESSING IS VERY IMPORTANT AND I REFUTE MR.

JUDGE'S COMMENT THAT CHEESE ISN'T IMPORTANT TO THE INDUSTRY.

WE WOULDN'T BE DOING WHAT WE'RE DOING TO MAKE VALUE-ADDED PRODUCTS FOR FARMERS WITH $50 MILLION OF BORROWED MONEY IF WE DIDN'T THINK THAT WAS VERY IMPORTANT.

AND I THINK, ALSO, MR.

JUDGE'S COMMENTS ALSO SHOW THE CANNIBALISM OF NICHE MARKETING THAT CAN BE VERY DESTRUCTIVE WITHIN THE MARKET.

THERE ARE FARMERS THAT PRODUCE IN THE STATE, INCLUDING MYSELF, BETTER MILK THAN HIS PRODUCERS, AND JUST WITH THE CHEESE VERSUS HIS FLUID BUSINESS I THINK NICHE MARKETING YOU'VE GOT TO BE VERY CAREFUL BECAUSE THERE CAN BE A REAL CANNIBALISM THERE.

>> A CANNIBALISM OF NICHE MARKETING, STEVE JUDGE?

>> YOU'RE TALKING ABOUT FREE ENTERPRISE AS COMPARED TO A RIGID SOCIALISTIC MARKETING STRUCTURE PROTECTED BY THE GOVERNMENT THAT IS MOST SIMILAR TO WHAT WAS FOUND IN EAST GERMANY.

WE'VE GOT A GUARANTEED MARKET, GUARANED PRICING; THAT THERE IS VERY LITTLE EMPHASIS ON QUALITY.

WE'VE GOT FLUID MILK BEING MARKETED.

NOBODY IS TRAINED TO FLAVOR TEST OR CORRECT FLAVOR PROBLEMS AT THE FARM END.

WE'VE GOT MANUFACTURERS SAYING THEY HELP DAIRY FARMERS, AND THE MORE THEY MAKE THE LESS MONEY THE FARMERS GET.

I THINK YOU HAVE TO STAND BACK AND EXAMINE THE STRUCTURAL PROBLEMS.

IT'S NOT THAT WE WANT TO CLOSE OFF NEW ENGLAND.

THE GOVERNMENT SYSTEM THAT'S INSTALLED IN TERMS OF REGULATION OF MILK MAKES IT EASY FOR PEOPLE TO BRING MILK IN.

>> EAST GERMAN STYLE SOCIALISM, MR.

JUSTIS?éE >> I'M NOT SURE HOW TO COMMENT ON THAT.

>> (MS.

MACDNALD) IT DOESN'T WORK LONG TERM, WE KNOW THAT.

>> (MR.

JUDGE) IT'S NOT WORKING FOR THE VERMONT FARMERS.

>> (MODERATOR) LET'S LET MR.

JUSTIS RESPOND.

>> THERE IS A TYPE OF SOCIALISM WITH THE DAIRY INDUSTRY IN CANADA, AND PROBABLY THERE'S PEOPLE THAT HAVE MORE KNOWLEDGE ON THAT, BUT THAT'S THE REASON THAT WE HAVE DAIRY PROCESSORS COMING DOWN TO VERMONT LOOKING FOR MORE ... >> (MR.

JUDGE) CHEAP MILK.

>> OKAY.

SO IT'S A PRETTY COMPLEX PROGRAM.

AND I GUESS IT'S WORKING TO SOME EXTENT IN CANADA, BUT CANADA IS GOING TO BE FORCED TO OPEN THEIR MARKETS FOR BETTER OR FOR WORSE IN THE FUTURE.

>> (MS.

MACDONALD) SEGUE TO G.A.T.T.

>> ROBERT?

>> CONSUMERS DON'T KNOW ANY BETTER THAN BUT TO BUY CHEAP MILK, I THINK WE COULD ALL AGREE UPON THAT, AND WHAT WE'VE GOT TO DO IS EDUCATE THEM OTHERWISE, THAT THERE'S MORE TO PRODUCING MILK.

WE'VE SEEN THAT.

I DON'T THINK THERE'S ANY MORE GOODWILL TOWARD DAIRY FARMERS BY CONSUMERS THAN THERE POSSIBLY COULD BE.

WE GET TREMENDOUS RESPONSES FROM CONSUMERS.

>> LET'S GO BACK TO THE AUDIENCE.

PLEASE IDENTIFY YOURSELF.

>> MY NAME IS KENT SMITH.

I'M THE OWNER OF CROWLEY CHEESE.

I WOULD HAVE TO SAY THAT I AGREE WITH MANY THINGS THAT STEVE SAYS, ALOUGH MAYBE NOT THE WAY HE SAYS THEM, NOTWITHSTANDING THE FACT THAT IN EFFECT AS A PURCHASER OF MILK I'M ON THE OTHER SIDE OF THE FENCE, BUT I DO THINK THAT ESSENTIALLY THE ONLY WAY THAT FARMERS ARE EVER GOING TO GET A BETTER SHAKE, AND THEY CERTAINLY DON'T GET ANYTHING LIKE WHAT THEY SHOULD, IS THROUGH VALUE-ADDED PRODUCTION, WHETHER IT'S DONE IN ROBERTA'S WAY BY CHANGING MILK INTO SOMETHING ELSE, OR IT'S DONE STEVE'S WAY OF CHANGING THE CONSUMER'S PERCEPTION OF WHAT THAT MILK IS AND THAT THERE ARE DIFFERENCES IN MILK.

HOWEVER, THAT TAKES MONEY, AND I THINK WE HAVE TO DO IT THROUGH BRINGING PRIVATE ENTERPRISE MUCH MORE; RATHER THAN THE CO-OP SYSTEM OF ORGANIZING OUR DAIRY INDUSTRY, I THINK WE HAVE TO BRING PRIVATE ENTERPRISE INTO THE DAIRY FIELD, AND I THINK ONE OF THE WAYS THAT THIS SHOULD BE DONE IS TO ALLOW FARMERS, DAIRY CO-OPS SHOULD HAVE THEIR SHARES SOLD ON THE STOCK MARKET THE WAY ANY OTHER COMPANY IS BOUGHT AND SOLD.

FARMERS SHOULD BE ABLE TO OWN THOSE COMPANIES IN THAT FASHION RATHER THAN SIMPLY BEING MEMBERS OF A CO-OP.

>> A RESPONSE, MR.

ROSS?

>> I GUESS I WOULDN'T DRAW A LINE BETWEEN THE PRIVATE ENTERPRISE AND THE CO-OP.

I THINK THE GOAL HERE IS TO SUPPORT THE INNOVATORS IN VERMONT, AND IF THE INNOVATORS THAT CAN BRING A MARKET SHARE TO VERMONTERS AND A MARKET PRICE TO VERMONTERS IS THE CABOT CO-OP AND THEY CAN DO THAT, I THINK THAT'S IMPORTANT.

BEN & JERRY'S IS A PERFECT EXAMPLE, AND THEY SHOULD BE IDENTIFIED AS PREMIERE MARKETERS.

AND THEY'VE INNOVATED AND THEY'VE BEEN SUPPORTED.

AND THEY STARTED OUT VERY SMALL, AND WE NEED TO FIND A WAY, WORKING WITH THE CO-OPS, WITH STATE GOVERNMENT, WITH THE PRIVATE ENTERPRISE, TO SUPPORT THAT KIND OF ENTREPRENEUR, WHETHER THEY EVOLVE INTO A CO-OP OR AN ASSOCIATION.

>> A QUICK FOLLOW UP IF YOU WILL.

>> YES, BECAUSE I WAS GETTING TO THAT POINT.

$3 MILLION A YEAR IS WITHHELD FROM FARMERS IN THE STATE OF VERMONT UNDER THE DAIRY PRODUCTION STABILIZATION ACT OF 1983.

THAT MONEY IS NOT PAID TO FARMERS RIGHT HERE IN THE STATE OF VERMONT BECAUSE IT'S USED TO ADVERTISE MILK IS HEALTHY AND IS GOOD AND YOU ALL OUGHT TO BUY MILK, OR CHEESE OR ICE CREAM ALL OVER THIS COUNTRY.

I HAVE ALWAYS SAID THAT MONEY OUGHT TO BE PAID BY THE KENT SMITHS, AND THE ROBERTA MCDONALDS AND THE OTHER PEOPLE IN THE WORLD AND NOT THE FARMERS.

THAT MONEY OUGHT TO STAY IN THE FARMER'S POCKET.

THEY SHOULDN'T HAVE ADVERTISE TO GET PEOPLE TO BUY MY CHEESE.

>> SHOULD THE MONEY STAY IN THE FARMER'S POCKET, MR.

JUSTIS?

>> THE MONEY THAT'S TAKEN OUT OF THE FARMERS MARKET IS THE RESULT OF A MARKETING ORDER, WHICH MEANS THAT NATIONALLY AND AT THE STATE LEVEL THAT THE FARMERS HAVE AGREED THAT THEY NEED TO POOL THEIR MONEY TO DO SOME ADVERTISING, AND THAT MONEY IN VERMONT IS CONTROLLED TO SOME EXTENT BY STATUTE, BUT THEN ALSO THE VERMONT DAIRY PROMOTION COUNCIL HAS QUITE A LOT OF SAY IN WHERE THAT MONEY GOES.

SO IT'S NOT QUITE AS BLACK AND WHITE AND, ACTUALLY, IT'S MONEY THAT'S TAKEN OUT OF THE FARMERS MARKETS WITH THE MAJORITY CONSENT.

>> STEVE JUDGE?

>> PEOPLE LAUGH WHEN I SAID EAST GERMANY.

HERE WE GO AGAIN.

THE FARMERS DON'T HAVE A ONE MAN-ONE VOTE ON THAT ISSUE.

THERE WAS A GREAT INITIATIVE TO WITHDRAW THAT SYSTEM, AND THE ONLY WAY THAT THAT WAS BEATEN WAS THE U.S.D.A.

ALLOWED BLOCK VOTING, WHICH MEANT THAT ONE ORGANIZATION COULD VOTE FOR ITS ENTIRE MEMBERSHIP.

SO IF YOU HAD A CO-OP THAT HAD 1500 MEMBERS, 6 MEMBERS OF THE BOARD OF DIRECTORS COULD VOTE TO DECIDE WHAT THAT WHOLE CO-OP WOULD VOTE.

INDIVIDUAL FARMERS COULD HAVE DISSENTING OPINIONS, BUT THAT MEANS THEY WOULD HAVE TO GO THROUGH THE WHOLE PROCESS.

MY FEELING IS THAT MONEY DOES SOME GOOD.

THERE SHOULD BE AN INDUSTRY ORGANIZATION OUT THERE PROMOTING THE HEALTHFULNESS OF MILK LIKE EVERY INDUSTRY HAS THEIR ORGANIZATION.

WE SHOULDN'T RELY ON GENERIC ADVERTISING.

I WOULD LIKE TO NOTE THAT UNDER NO CIRCUMSTANCES CAN WE AS AN ORGANIZATION EVEN COME CLOSE TO GETTING ANY OF THAT MONEY.

>> ROBERT WELLINGTON?

>> I AGREE WITH STEVE.

I THINK THAT MONEY DOES US SOME GOOD.

I DON'T AGREE WITH STEVE IN TERMS OF THE BLOCK VOTING BECAUSE WE BLOCK VOTED FOR OUR MEMBERS AND WE SENT EACH INDIVIDUAL FARMER A BALLOT THAT SAID, "IF YOU WANT TO VOTE DIFFERENTLY, HERE'S THE BALLOT.

IT'S RIGHT IN YOUR MAILBOX.

HERE'S WHY WE'RE VOTING."

SO THERE COULD BE THAT.

IT'S A LOT EASIER TO DO IT ON A BLOCK VOTING STATUS.

>> OUR TIME IS DRAWING SHORT.

I'D LIKE TO GET THE AUDIENCE INVOLVED AS MUCH AS POSSIBLE.

WE'LL COME BACK TO YOU.

>> WHAT IF THE DEMOCRATIC PARTY DID THAT AND THE REPUBLICAN PARTY DID THAT FOR THEIR MEMBERSHIPS, WE'LL VOTE FOR YOU IF YOU DON'T WANT TO VOTE?

>> FROM THE AUDIENCE?

>> I'M EDWARD JANEWAY FROM NORWICH, AND I HAVE SOME PARTIALITY TO MILK, WORKING WITH THE FEDERATION WHICH MR.

WELLINGTON HAS REFERRED TO HERE TONIGHT, AND MY FAMILY HAS ALSO BEEN IN DAIRY FARMING.

IN TERMS OF OPENING UP MORE MARKETS, THE GLOBAL MARKETPLACE OUTSIDE THE U.S.A., WHAT SPECIFICALLY ARE THE POSSIBILITIES UNDER N.A.F.T.A.

AND G.A.T.T.

FOR GREATER EXPLOITATION OF VERMONT PRODUCTS?

>> THIS TAKES US INTO THE GLOBAL MARKET SITUATION.

WHO WOULD LIKE TO RESPOND TO THAT?

YES, MR.

JUSTIS?

>> I JUST MENTIONED SOME OF THE MONEY THAT WAS TAKEN FROM THE DAIRY FARMERS' POCKETS.

THEY ARE SPONSORING 3 BOOTHS AT A TRADE SHOW DOWN IN MEXICO CITY THIS FALL BECAUSE I THINK THERE IS SOME OPTIMISM.

THERE'S ABOUT 86 MILLION CONSUMERS DOWN THERE, 50% OF THOSE UNDER THE AGE OF 20.

SO WE SEE THAT THERE'S A GOOD POTENTIAL MARKET.

THE NATIONAL DAIRY BOARD HAS ANALYZED THAT MARKET, THE FOREIGN AG SERVICE AND OTHERS, AND SHOWS THAT AT LEAST FOR THE FORESEEABLE FUTURE THAT MEXICO ISN'T GOING TO BE A VIABLE COMPETITOR WITH THE UNITED STATES.

AND SO THAT I THINK WE ARE STARTING TO LOOK AT THAT MARKET, AND I THINK THERE IS QUITE A LOT OF OPPORTUNITY FOR CERTAIN PRODUCTS DOWN THERE.

>> IS SENATOR LEAHY INVOLVED IN THIS, MR.

ROSS?

>> CERTAINLY IS.

THE N.A.F.T.A., WHICH THE SENATOR SUPPORTED, AFTER TAKING A HARD LOOK AT IT FROM AN AGRICULTURAL STANDPOINT, WE RECOGNIZE THAT MEXICO IS OUR LARGEST DAIRY CONSUMER RIGHT NOW.

WE HAVE AN INCREDIBLE MARKET POTENTIAL IF WE CAN SUCCESSIVELY ACHIEVE SOME NEGOTIATIONS WITH CANADA JUST NEXT DOOR FROM VERMONT'S STANDPOINT.

ON G.A.T.T., IT'S A MUCH MORE COMPLICATED ISSUE.

I CAN'T STAND HERE AND PROFESS TO BE AN EXPERT ON G.A.T.T.

ONE OF THE THINGS THAT G.A.T.T.

TALKS ABOUT, HOWEVER, IS LOWERING TARIFFS AND LOWERING SUBSIDIES IN VARIOUS COUNTRIES.

TO THE DEGREE THAT CAN HAPPEN AND THE DEGREE THAT VERMONT AGRICULTURE OR THE UNITED STATES AGRICULTURE CAN PRODUCE AT A LOWER COST AND DOESN'T NEED AS GREAT A SUBSIDY, WHICH IS GENERALLY THE CASE IN AGRICULTURE COMMODITIES AS COMPARED TO EUROPE, THEN THERE IS AN OPPORTUNITY.

THAT'S THE OPPORTUNITY OF G.A.T.T.

IS THAT THE EUROPEANS AND JAPAN, FOR EXAMPLE, MAY HAVE TO LOWER THEIR TARIFFS OR LOWER THEIR SUBSIDIES WHICH IS BENEFICIAL FOR THE U.S.

AND POTENTIALLY VERMONT AGRICULTURE.

>> ROBERT WELLINGTON?

>> WE THINK THAT U.S.

MILK PRODUCERS CAN COMPETE WITH ANYONE IN THE WORLD IF YOU'RE NOT SUBSIDIZING THE PRODUCT.

IN FACT, WE THINK THAT WORLD PRICE COULD RISE UP TO $13, $14 LEVEL.

NOT ENOUGH FOR ALL FARMERS, BUT ENOUGH FOR A LARGER NUMBER.

HOWEVER, G.A.T.T.

DOESN'T ALLOW THAT.

SO WE HAVE SOME VERY SERIOUS CONCERNS IN TERMS OF THE DAIRY INDUSTRY.

WE THINK N.A.F.T.A.

IS A LITTLE BIT DIFFERENT.

WE THINK MEXICO IS A GROWTH AREA.

THEY HAVE A LARGER MIDDLE CLASS THAN CANADA, FOR EXAMPLE.

SO THERE'S A LOT OF POTENTIAL.

THEY'RE MAJOR DAIRY CONSUMERS.

GO TO ANY MEXICAN RESTAURANT, LOOK AT THE MENU, YOU'LL SEE HOW MUCH DAIRY PRODUCTS THEY CONSUME.

SO WE SEE A LOT OF POTENTIAL, BUT WE HAVE CONCERNS ON G.A.T.T.

>> WHAT ELSE CAN WE SELL INTERNATIONALLY, MR.

JUSTIS?

MAPLE SYRUP?

>> WE ALREADY DO.

>> ON A LARGER SCALE THAN WE ARE?

>> CERTAINLY.

RIGHT NOW FOR THE LAST PROBABLY 10 YEARS WE'VE CONCENTRATED PRIMARILY ON EUROPE, BUT ONE OF THE BENEFITS OF EXPORTING IS THAT YOU CAN BALANCE MARKETS.

AND IF ONE SECTION OF THE GLOBE IS HAVING A RECESSION, THEN PROBABLY ANOTHER SECTION IS HAVING A BOOM IN THEIR ECONOMY.

RIGHT NOW THAT BOOM IS IN THE PACIFIC RIM IN ASIA.

AND SO WE'VE BEEN JUST WITHIN THE LAST FEW YEARS CONCENTRATING A LOT OF OUR EFFORTS FOR MAPLE IN ASIA.

WE SEE A LOT OF THE MARKETS.

IT'S REALLY A DYNAMIC MARKET IN ASIA.

THEY'RE NOT REALLY FAMILIAR WITH A LOT OF DAIRY PRODUCTS AND THERE ISN'T DAIRY PRODUCTION THERE, SO WE SEE A LOT OF OPPORTUNITIES EVEN FOR DAIRY PRODUCTS IN ASIA.

>> STEVE JUDGE?

>> AND IN CHEESE.

>> LET ME RESPOND.

>> IT'S A HOT NIGHT, STEVE.

>> WE'REGRICULTURE.

WE'RE NOT PROCESSORS.

ARE WE SITTING HERE HAVING A PANEL ABOUT HOW TO IMPROVE THE PROFITABILITY OF PROCESSORS OR ARE WE SITTING HERE HAVING A PANEL DISCUSSION ABOUT HOW TO IMPROVE MARKETING OPPORTUNITIES FOR VERMONT DAIRY FARMERS?

>> STEVE IS A PROCESSOR.

YOU SHOW YOUR HALF GALLON MILK, YOU'RE INVOLVED IN THAT INDUSTRY.

>> I HIRE A PROCESSOR.

>> BUT YOU'RE STILL INVOLVED IN THAT END OF THE BUSINESS.

>> OUR INCOME STREAM PROVIDES A MUCH GREATER RETURN TO THE FARMERS BECAUSE WE CONTROL IT.

>> BUT THE PROBLEM IS ONCE AGAIN, WE'RE TALKING ABOUT A VERY SMALL GROUP.

I HOPE THAT YOU CAN REACH 100 FARMERS.

I THINK THAT WOULD BE GREAT, BUT YOU'RE NOT THERE NOW.

WE HAVE TO DEAL WITH THE REALITY OF WHERE WE ARE.

>> BACK TO THE AUDIENCE FOR ONE MORE QUESTION.

>> SUZANNE LONG AGAIN.

SORRY.

SO MUCH OF THESE ISSUES ARE SO COMPLICATED, AND WE GET OFF INTO LOCAL OR GLOBAL, WHAT'S THE BEST, BUT I WANT TO REMIND US, WE ALL EAT.

ALL THE FOOD THAT WE EAT OR A LARGE PERCENTAGE OF IT THAT WE EAT IS GROWN ON FARMS.

WHY IS IT THAT FARMERS, FAMILY FARMS, CANNOT MAKE A LIVING?

FAMILY FARMS, THAT'S WHAT WE'RE TALKING ABOUT HERE BECAUSE THAT'S WHAT VERMONT IS.

IT'S NOT AGRI-BUSINESS WE'RE TALKING ABOUT.

WE'RE TALKING ABOUT FAMILY FARMERS.

FAMILY FARMERS ARE STRUGGLING TO MAKE A LIVING.

WE AREN'T PRODUCING PET ROCKS AND MICROWAVES, THINGS WE CAN DO WITHOUT.

THIS IS FOOD WE ALL NEED.

A LOT OF THIS GARBAGE THAT WE'RE TALKING ABOUT IS REALLY ARTIFICIAL, AND IT'S CUTTING THE BOTTOM OUT OF A BASIC NEED.

>> JANET BAILEY, IS THIS A FAIR ASSESSMENT FROM YOUR PERSPECTIVE?

>> YES, IT'S A VERY GOOD PERSPECTIVE.

I'VE SAID IT BEFORE, WE'VE GOT TO BE SMALL PRODUCERS, WE'VE GOT TO SELL IT LOCALLY, BUT IT IS PARTLY CONSUMERS' RESPONSIBILITY.

IT'S SOCIETY'S RESPONSIBILITY.

WE'VE GONE AWAY FROM EATING SEASONALLY, AND THIS IS WHY FARMERS ARE HURTING SO MUCH.

THIS IS WHY CALIFORNIA HAS SUCH A NICHE IN VERMONT, BECAUSE EVERYBODY NOW EXPECTS LETTUCE, AND TOMATOES, AND CUCUMBERS ALL YEAR ROUND.

WE'RE GONE FROM THE DAYS WHEN WE PULL CABBAGE, AND POTATOES AND CARROTS OUT OF THE ROOT CELLAR BECAUSE THAT'S WHAT'S AVAILABLE TO EAT.

>> IF NOTHING ELSE, THIS DISCUSSION ABOUT MARKETS AND MARKETING HAS SHOWN US HOW COMPLEX, HOW DEMANDING, HOW INCREDIBLY IN SOME CASES INSOLUBLE THE FARMER'S LIFE IS AS WE ENTER THE 21ST CENTURY.

I WASN'T KIDDING AT THE BEGINNING OF THE SHOW.

IT ISN'T JUST ABOUT FEEDING CATTLE AND REPAIRING FENCES.

IT IS ABOUT BEING A SOPHISTICATED PARTICIPANT IN A NATIONAL ECONOMY, AN INTERNATIONAL ECONOMY, HAVING A RESPONSIBLE POINT OF VIEW ABOUT THE DEGREE OF GOVERNMENT'S RELATIONSHIP WITH FREE ENTERPRISE AND UNDERSTANDING THE NEEDS OF PEOPLE WHO NEED TO BE FED, THE PEOPLE WHO WANT TO CAPITALIZE.

ALSO, I THINK ONE OF THE IMPORTANT POINTS WE MADE TONIGHT IS THAT MARKETING DOESN'T JUST MEAN APPROPRIATING THE SLICK IDIOMS OF MADISON AVENUE.

ALTHOUGH IT MEANS THAT IN PART, IT ALSO MEANS EDUCATION.

IT MEANS INCREASING THE LITERACY OF OUR FELLOW CITIZENS AS TO WHAT FARMING IS ALL ABOUT, THE STAKES THAT INVOLVE ALL OF US.

I WOULD LIKE TO THANK THE PANEL FOR AN EXTRAORDINARILY CANDID, ENERGETIC AND INTENSE DISCUSSION TONIGHT.

I THINK IT HAS BEEN EXTREMELY VALUABLE.

I HOPE THAT YOU WILL CONTINUE TO FOLLOW OUR TOWN MEETINGS.

I'D LIKE TO SAY THANK YOU FOR WATCHING TONIGHT.

I'M RON POWERS.

GOOD NIGHT.