Milling & Baking News - September 6, 2005 - 42

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Former U.S.D.A. officials urge less
spending on commodity programs
Continued from Page 1
Secretary of Agriculture standby authority to require moderate crop acreage
reductions as a condition for farm program eligibility and to reestablish grain
and oilseed reserve programs "in the
interest of farm and food price stability
and control of budgetary expenditures."
In order to begin to rein in costs of commodity programs, Mr. Schnittker and Dr.
Cochrane urged the elimination of Agricultural Market Transition Act (A.M.T.A.)

Security and Rural Investment Act of 2002,
through fiscal 2003, producers collected another $10 billion in fixed direct payments
(the new version of the original A.M.T.A.
payments), making for nearly $43 billion in
fixed direct payments to producers in eight
years. Fixed direct payments are ongoing
and will be continued through 2007, when
the current farm law expires.
Mr. Schnittker and Dr. Cochrane
acknowledged that the current marketing loan program effectively has ended

payments in the next farm bill. Since 1996,
A.M.T.A. payments have been provided
to eligible growers on a designated portion of their historical production of farm
program crops. Because the payments are
made without regard to current production, farmers have been "free" to plant
whatever they wanted on land they
previously felt compelled to plant to the
program crop in order to maintain their
acreage base, key to realizing benefits
from previous government farm price
support programs.
Mr. Schnittker and Dr. Cochrane asserted that the A.M.T.A. payments were
instituted "purely as a political incentive to farm groups to support the 1996
farm bill." The initial stated intent of the
A.M.T.A. payments was to assist producers during the transition to a more
market-oriented farm economy. But the
direct payments to producers were continued under the 2002 farm bill.
Under the Federal Agriculture Improvement and Reform Act of 1996, eligible
producers collected more than $32 billion
in A.M.T.A. payments. Under the Farm

government ownership of commodities
in years when crops are in surplus.
Under the marketing loan program,
a producer has the option to take out
a nine-month non-recourse loan on his
crop from the Commodity Credit Corp.
at a loan rate established by law for that
crop. The producers may pay back the
loan at any time during the nine months
at the loan rate plus interest or at the current market price, whichever is lower. So
when market prices fall below the loan
rate, and the producer redeems his crop
at the lower market price, he achieves
what is called a "marketing loan gain."
Alternatively, a producer may forego
taking a loan on his production and instead collect loan deficiency payments
on his crop at any time in the course of
a marketing year. L.D.P.s are made when
market prices dip below the loan rate for
a program crop. The L.D.P. covers the
difference between loan rate for the crop
and the lower market price. When market prices drop below the loan rate, the
producer may collect the L.D.P. and then
market his crop at the time of his choice

bakingbusiness.com / world-grain.com

25 ft. Tall cake for Bob Hope.
No problem for this bakery.
Seven generations ago Hulger
Hansen baked delicious cakes for the
discriminating taste of Scandinavian
Kings. Now, more than 100 years later,
Hansen Cakes in California has the
well earned reputation of baking the
finest quality special order cakes
money can buy.
And they have the
clientele to prove
it.
With three locations in the Golden
State, Hansen Cakes
Patrick Hansen has catered to
Hollywood stars
such as Sylvester Stallone and Arnold
Schwartzeneger, as well as Presidents
Reagan, Ford, and Kennedy.
Patrick Hansen, current president
of the company, says all Hansen Cakes
are special ordered and made from
scratch. Customers roam a 5,000 sq. ft.
showroom to select from display cakes,
and may preview their choices from
more than 1,000 cake photos.
"Since all of our cakes are special
ordered and made from scratch, we're
ver y particular about ingredients.
That's one of the main reasons we use
flavors from International Bakers
Services. They blend particularly well
in all our recipes and have a wonderful taste, delightful aroma and true
consistency that results in a delicious
product that keeps customers coming
back. We also happen to be one of
International's oldest customers," he
said.
Patrick Hansen mentioned that
television network NBC wanted the
biggest cake in the world for Bob
Hope's 50th Anniversar y Party. The
result was a 25 ft. cake that fed 2800
guests! At that time, it was the tallest
cake ever made.
"We needed to hire a carpenter to
build the framework to support the
weight of the cake," he said. Tall order
fulfilled.
Let us help you fulfill your tall
orders -- Call or write International
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sample and flavor listing. Call 1-800345-7175, fax (574) 287-7161 or write
1902 N. Sheridan Ave., South Bend,
IN 46628. We have the flavors your
customers deserve.
Milling & Baking News, September 6, 2005 / 43
http://www.bakingbusiness.com http://www.world-grain.com
Milling & Baking News - September 6, 2005

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