NFU on House CFTC reauthorization bill
WASHINGTON – National Farmers Union (NFU) President Roger Johnson issued the following statement on the April 9 U.S. House Committee on Agriculture markup of H.R. 4413, the Customer Protection and End-User Relief Act:
“Well-functioning, competitive and transparent markets are critical to family farmers, who use commodity derivatives markets as a hedging and price discovery tool. The Dodd-Frank Act authorized long-overdue derivative market reforms and the enforcement of new and existing trading rules to protect commodity-dependent businesses, end-users and consumers. Reauthorization of the Commodity Futures Trading Commission (CFTC) must reinforce, not undermine, Dodd-Frank’s provisions and CFTC’s expanded oversight.
“I am pleased that a study on the impact of high frequency trading is included in the bill, but there ought to be further studies on excessive speculation and its damaging effects on price discovery and the marketplace in general.
“Furthermore, it’s disappointing that a self-funding mechanism or user-fee for the CFTC was not included in the bill. The annual appropriations battles over CFTC funding are disruptive to the agency’s regulation of the $690 trillion swaps market. While these and other priorities are considered in the legislative process, NFU seeks to continue to work with Congress to enact an effective final bill.
“Additionally, none of the two current CFTC commissioners or three pending nominees has agricultural experience, in spite of the commission’s jurisdiction over agricultural commodity derivatives and the underlying physical markets. I urge Congress to stress to the administration the importance of qualified CFTC nominees who understand the unique needs of farmers and commodity end-users.”