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Mr. Thomas of Wyoming. Sure they are. The point is, what is the 

 role? And I don't know the answer. And I don't mean to be argu- 

 mentative, but I think you have to really— objectively look at the 

 role of different folks as to what they are doing and how it affects 

 others, and that is why I am glad you are here. And it seems to 

 me that is the issue. The high value ones, Mr. O'Connell. 



I hear a lot of complaints — not a lot of complaints, criticism of 

 promotion of products that are processed products. McDonald's, 

 large companies whose products — ^the theory we are promoting, ag- 

 ricultural products. But in between there is a manufacturer, and 

 we say, geez, they have more money then we do, why are we subsi- 

 dizing? 



Have you heard that? 



Mr. O'Connell. Yes. 



Mr, Thomas of Wyoming. How do you respond. 



Mr. O'Connell. First of all, most of our products are with small 

 companies as I indicated earlier. One of the problems we have in 

 agriculture that we have done a lot of research on, new uses for 

 ag and forestry materials. Unfortunately, not a whole lot of those 

 have gone to the development stage, to the market stage and got- 

 ten at all actually on the marketplace. 



Quite frankly, there is a market failure. It used to be very simple 

 when you had a simple product, it goes fairly quickly to the mar- 

 ket. But the cost of bringing something to the market now is very 

 expensive. You have the testing cost, somebody buys a property, 

 . they have all kinds of specifications. You have to prove that the 

 technology works, all those kinds of things. 



It takes 5 to 10 years and generally companies look at these, es- 

 pecially small companies, and they look at 1- or 2-year framework. 

 All we try to do in our program is to help bridge the gap between 

 research ideas and getting a product on the market. 



Like I say, almost 90 percent, 85 percent of ours are with small 

 companies, but there are a few technologies. You have got to work 

 with bigger companies that get the products on the market. If you 

 don't do it, they won't do it. 



Mr. Thomas of Wyoming. I understand. 



Mr, O'Connell, In our case, we are just trying to get start-up 

 costs and if it is successful, we plan to get the money back. 



Mr. Thomas of Wyoming. That, of course, is the classic issue be- 

 tween basic research and commercial use. 



Mr. O'Connell. That is right. 



Mr. Thomas of Wyoming. That is why around Duke University 

 and other places, you have a row of people who play that role. They 

 go from basic research to the entrepreneuriad thing. And the entre- 

 preneurial thing isn't your job, is it? 



Mr, O'Connell. No. But we enter our project with private com- 

 panies. They have to put up at least 50 percent of the money. 



Mr. Thomas of Wyoming. I am still seeking to define our roles 

 here and what we do. 



Mr. O'Connell. I know. But we are just providing start-up 

 money is all. When we get applications, we require that it be pri- 

 vate companies that are putting money up front. 



Mr. Thomas of Wyoming. Thank you. 



Mr. Penny. Mr. Stupak, 



