Financial reform legislation and ag
Farm and Ranch April 26, 2010 The full U.S. Senate could move ahead with formal debate this week on a financial regulation package. Once debate begins Senate aides say it could last at least two weeks. Congressional agriculture committees have been involved in the reform efforts due to their jurisdiction over the Commodity Futures Trading Commission. The Senate Ag Committee passed out a bipartisan bill last week that committee chair Blanche Lincoln says will reign in speculative trading in risky derivatives that can affect commodity prices. It imposes mandatory clearing and trading requirements and real-time reporting of derivative trades. Lincoln: “I think that really being able to eliminate a lot of the risky business that is out there will really allow us to deal with some of the volatility that exists.” Lincoln says agriculture and other commercial interests will still be allowed to use derivatives or customized contracts to manage risk. Lincoln: “We have very painstakingly tried to make that a narrow section. All of the bills obviously have an exemption for some end-users. We tried very narrowly to focus on those end-users and figure out who of those really do need that commercial risk, ability to hedge that commercial risk.” The House of Representatives has already passed legislation on financial regulatory reform and derivatives. That bill included provisions strengthening position limits on futures contracts for physically-deliverable and over the counter commodities to prevent potential price distortions caused by excessive speculation. I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net. ?
