SEC. JOHANNS: I really was looking forward to sitting down with him and very anxious to talk about our working relationship with Japan. Of course beef was going to be kind of the central topic. I don't see this though as any kind of set-back. I'm not sure who the next minister will be. I certainly haven't heard that yet, but whoever it is I'll call him immediately, establish a relationship and the hope is that we can get together in the not-too-distant future. But I don't think we'll lose any momentum here. I think this is headed in the right direction hopefully.

REPORTER: Mr. Secretary, you had, I think Dr. Clifford and some other technicians heading to, left for Tokyo this week. That hasn't affected the technical talks -

SEC. JOHANNS: That has not. We'll continue those technical talks and like I said, I just don't anticipate any slow-down in our efforts to try to get this market reopened.

REPORTER: The last few months the Japanese agriculture minister has changed hands twice, so what do you think about the difficulty in starting real ministerial negotiation of the beef issue?

SEC. JOHANNS: Our working relationship with Japan is very, very strong, and it's stronger than a single minister. I think that would be true here on the United States side. So our technical talks will continue, we'll continue working through the issues we have, in this case beef. I'll be very anxious to learn who the new minister is and like I said I'll arrange a call to visit with the new minister immediately, and hopefully we can visit face to face in the not to distant future. But none of this has really set anything back. The working relationship at the staff level and technical level is very strong, and so it hasn't been a problem.

REPORTER: Mr. Secretary, can you go through in what's happening in South Korea? I understand we have another shipment in question with some specified risk materials.

SEC. JOHANNS: Yes. Here's what I can offer. Let me if I might just refer to my notes so I get this correct. It is my understanding that South Korea has found a vertebral column in one of the boxes that was shipped over there. Now here's a very important point. This was from an animal under 30 months of age. The vertebral column from an animal under 30 months of age is within OIE standards. It would be perfectly okay here, and any country that is honoring OIE standards it would not be a problem.

But we have this interim protocol if you will with South Korea to try to get some beef going. And the vertebral column should be removed, and we acknowledge that.

Now here's the other thing I would offer. As of today we have shipped close if not over 600,000 boxes of beef to Korea. Korea is actually I think today a larger market than Japan is. Of those 600,000 boxes, thereabouts, we've have six boxes where there was some issue of some nature.

So you could see, this has really worked remarkably well. I would just be very bold in saying that kind of number whether you're dealing with Kias or Toyotas or beef is a very, very strong number.

And so my point is this. My hope certainly is that South Korea works with us. We will work with them. But the real solution to this problem, the real solution to this issue I should say, is to go to OIE standards. That's what we're doing, and that's what we're expecting our trading partners to do, and these issues just simply disappear. This would not even be an issue if we were at OIE standards.

So we're anxious to work with Korea to solve that, and we're anxious for Korea to finalize their protocol within OIE standards.

REPORTER: Did they put a ban on or is it a plant in question or -

SEC. JOHANNS: We don't know at this point exactly what they're going to do. I think that will develop over the coming hours. I think we'll know more about that. My hope is that there isn't a ban on U.S. beef or anything like that because again we're talking so far about 600,000 boxes and about six of them weren't within their protocol but all of them were within OIE standards. The solution is to get to OIE standards.

REPORTER: If you could, there's a place on the Farm Bill to allow some Food Aid to be bought from African farmers, instead of the small farmers like (unclear). What's your position on that?

SEC. JOHANNS: We support that. We have supported that in fact for the last couple years in budgets and missions and we have not been successful in convincing Congress. But it makes a lot of sense. It really is the right thing to do. It would be a small portion of our Food Aid that we would set aside for cash purchases, and here's the reason. There are certain instances where people are desperate and die of hunger, where it's truly a crisis situation. If we had the ability to use a portion of our Food Aid dollars to go out and make the purchase in close proximity and help those people, we would save lives. I don't think there's any doubt about it because oftentimes for us to go out into the open marketplace here, buy the food, package it, ship it, it just takes time. And in that period of time, sadly and unfortunately, people die.

So we want to use a portion, a small portion of our Food Aid to be able to buy wherever that crisis is at. This would not be something that we would use on a regular basis, but it would be very, very helpful in crisis situations.

REPORTER: Mr. Secretary, I understand that Chairman Petersen or his staff were down at USDA on Monday to try to figure out what really is going on with the (unclear) crop insurance program to see what kind of cuts they can really have in the Farm Bill. I was wondering if you were involved in that meeting, or what do you anticipate will go on in that?

SEC. JOHANNS: I was not involved in that meeting, although this is an area where we feel strongly that the proposals we submitted were really sound proposals and that you would still have a very strong crop insurance program; in fact we even boosted our crop insurance program under our program with the gap coverage that would cover that gap that is currently uninsured.

And we'll work with Chairman Petersen or whoever, because we do feel strongly that reform can come to this program and still have a very, very strong program.

REPORTER: One follow-up, I've gotten press releases from just about every farm group in the country praising the House for passing the Farm Bill. Now the Administration opposed it. How do you feel about the farm groups being so supportive of the House bill at a time when you're not happy with this?

SEC. JOHANNS: I don't know that I have any special feelings about that. I will tell you what I said in my speech last Friday. I think I'm as connected to farmers as any secretary in maybe a long time, maybe in history. And we did the listening sessions; I'm constantly out there visiting with farmers. I grew up on a farm. My experience with farmers, setting inside their group, my experience with farmers is that they are a conservative lot. If farmers stood for higher taxes on another industry to finance their programs, I think they would have told me that, and yet that did not come up to my memory in a single piece of testimony.

It's just a situation where I believe if you asked farmers out there what do they feel about in terms of higher taxes, they will tell you very straight, you live within your means. So I just think these are very conservative people, you know? I represented a state with a lot of farmers, and they were always very conservative with me. So that's how I feel about it.

REPORTER: Mr. Secretary -

SEC. JOHANNS: I don't find it unusual that groups here ask for programs. I think that's why they're here in Washington, to be honest with you. But again, my experience with farmers is they are very conservative.

REPORTER: Mr. Secretary, did you say it's because farmers in the listening session didn't bring up the tax proposal ahead of time?

SEC. JOHANNS: No. You're kind of flipping what I said.

REPORTER: I'm trying not to.

SEC. JOHANNS: No, we don't stand for higher taxes in this administration. We just clearly don't. But I will also tell you, I believe strongly farmers don't stand for higher taxes either. That's what ended up here. We literally had a situation where at the last minute a tax increase was stuffed into the rule that was voted on increasing taxes for another industry. And that was purportedly to finance a piece of this Farm Bill. All I can say is this - my experience with farmers is, they don't support higher taxes. And so I didn't hear it from them, no farmers calling me to day and saying Mike, I stand for higher taxes.

REPORTER: Did any farmers call and say that they were okay with it?

SEC. JOHANNS: You know, I haven't had farmers call me in -

REPORTER: Did they say they were mad about raising the taxes?

SEC. JOHANNS: You know, I haven't had farmers call me on that issue. But I will tell you very clearly, my experience with these people, they are very conservative. They didn't come to Lincoln when I was governor and say, You know, we want higher taxes. In fact, very much the opposite.

REPORTER: You brought up the $5 billion again at the beginning of your speech today. Can you give us just one example of a program to be cut for the extra agricultural spending in the President's Bill and your bill in the proposal?

SEC. JOHANNS: You're talking about a pay-go rule that Congress has adopted. What we do on the Administration side is, we build a budget. We build a budget that says, What's it going to take across the entire federal budget, what's it going to take for us to balance the budget in the next five years? I came in and I said, I think agriculture should be a priority. I'm going to ask you for $5 billion over the baseline to fund that priority; can you fit that within the overall budget, and can you agree with me that agriculture is a priority? To the President's credit, he said, I agree, I think it's a priority. And so as we prepared a budget for the entire federal system, he said, I want agriculture to have $5 billion over baseline.

Now, the Democrat leadership had that opportunity, they could have said we think agriculture is a priority and we want to put $5 billion more just like the Administration did. They approach it a different way. They said, You've got to go out and cut some other program or raise taxes or do whatever.

We built this into an overall budget plan and it works in a balances the budget within five years. So the answer to your question is, If you all across the federal budget there are increases, decreases, offsets, etcetera, but when it came to our budget, when it came to our Farm Bill budget, the President said, I believe in this priority, this is one where I'm going to say it's a priority for my administration, I will allow the Secretary to submit a Farm Bill that will be $5 billion over baseline.

And that's how we put this together. We stand for agriculture. That's why the President allowed me to do it, and it fits, and it works.

REPORTER: Sir, can I go back to the Japanese beef issue?

SEC. JOHANNS: Yes.

REPORTER: So do you have any idea when the second technical expert meeting will be held in Tokyo? So far, does it get along since the first meeting on July, --

SEC. JOHANNS: Yeah, but I think we have experts going over there as we speak. I mean so it's going to be within days.

REPORTER: Days?

SEC. JOHANNS: Yes. I don't know when exactly it is. We can get that information and get it to you, but yes, we've been pursuing that.

REPORTER: Is there any breakthrough? Do you expect any breakthrough?

SEC. JOHANNS: I sure hope so.

TERRI: Thanks everybody.