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Mr. CONDIT. And because you have already responded to ques- 

 tions, I may submit some questions in writing to Mr. Walker and 

 Mr. O'Connell and ask them to respond to my office. And then we 

 can move this meeting along because I may have to leave again. 



Thank you. 



Mr. Penny. Thank you. As we look at the potential for nonfood, 

 nonfeed uses, you gave several examples of success stories here in 

 the United States, listed a number of companies that AARC is al- 

 ready involved with. You also gave an example or two of products 

 that have been developed overseas. 



In comparison to Europeans or other nations, how does the Unit- 

 ed States stack up on this score? 



Mr. O'Connell. I have had the opportunity over the last, oh, 5, 

 6, 7 years to visit Europe, both individual countries and primarily 

 the European Community. 



And starting about 5, 6, or 7 years ago, they started getting into 

 finding new uses for ag and forestry materials in an industrial 

 area. And they are up to the point now where they are spending 

 five to seven times more money in this or bridging the gap between 

 research itself and commercialization. 



These remain primarily in demonstration projects. I just want to 

 give one as an example. They have a biodiesel demonstration 

 project going on right now and over a 3- to 4-year period they are 

 going to be investing $30 to $40 million in that. That is one dem- 

 onstration project I am talking about now. 



And just like in our case, they require matching funds by the pri- 

 vate sector. But they are doing this with different countries and 

 with companies and they are very serious about it. And one thing 

 we are trying to organize — and I think it would be very helpful to 

 try to organize — is a transatlantic conference next year. I think to 

 the extent that we can find more use, new uses for ag materials 

 and great diversity of markets and they can do it, it takes the pres- 

 sure off the whole trade situation and we are planning on having 

 that transatlantic conference next year. 



The other player in that area, of course, is Japan and they are 

 more interested in the finer, natural products, anything with high 

 value-added sort of thing. The pharmaceuticals, this kind of an 

 area. They are also moving into the polymers made out of renew- 

 able materials. They also are spending more money than we are. 

 I am not as familiar with Japan as I am with Europe. 



Mr. Penny. When we analyze the export market for value-added 

 or processed ag commodities, is that export market primarily food 

 items at present? 



Mr. O'Connell. It is certainly all food items. The whole, as you 

 well know. Congressman, the reason that was set up as nonfood, 

 nonfeed is that we saw that as an opportunity to have met new de- 

 mands for the country as a whole. But the current situation, so far 

 as exports are concerned, are almost totally food items, food and 

 fiber items. 



Mr. Penny. You indicated quite clearly in your testimony the 

 trend line on bulk commodities, the United States has seen its 

 share of the world trade in bulk commodities decline during the 

 1980's. And there is the relatively static growth in bulk commodity 

 demand worldwide. 



