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Congress asked to reauthorize CFTC
House Ag Committee leaders heard strong support for reauthorization of the Commodity Futures Trading Commission as part of a subcommittee hearing Thursday.
Walter Lukken is a former CFTC Commissioner and President and CEO of the Futures Industry Association.
“Our markets have grown significantly,” he says. “Total trading volume on CFTC regulated exchanges in the U.S. has doubled since 2008, the last time that this committee reauthorized the CFTC.”
Senior Vice President of Grain Marketing and Logistics of South Dakota-based Agtegra Cooperative Travis Antonsen says agricultural producers and cooperatives need highly functioning futures markets to manage price risks.
“In the process of buying grain from the farm to selling it to the end user or exporter, that bushel of grain may have had to trade futures four or five times by the time of the grain reaches its final destination,” he says. “The CFTC ensures integrity of those markets.”
He says the CFTC should be appropriately funded, but not by imposing additional user fees which would further erode ag commodity prices and discourage hedging.
Center for American Progress Senior Director of Financial Regulation Alexandra Thornton says the commission does not currently have the resources for existing duties and should not expand into new regulatory areas like carbon credits.
“Until the problems are fixed by other responsible public and private parties in a unified global system, voluntary carbon credit derivatives should not be listed or traded,” she says.
Thornton says expanded authority of the commission would distract from foundational responsibilities like overseeing physical ag commodity markets.
Lukken says there needs to be a legislative fix to resolve legal uncertainty surrounding bankruptcies, expanded ways to educate farmers about market opportunities, and more flexibility for research and development capabilities of the CFTC.
