NFU supports Lincoln’s derivatives bill to curb ‘unfair manipulation’

NFU supports Lincoln’s derivatives bill to curb ‘unfair manipulation’

By Agri-Pulse Staff

© Copyright Agri-Pulse Communications, Inc.

Washington, April 20 – National Farmers Union (NFU) President Roger Johnson praised Senate Agriculture Committee Chair Blanche Lincoln (D-AR) Tuesday for her financial market reform legislation, The Wall Street Transparency and Accountability Act of 2010 which Lincoln hopes to vote out of her committee Wednesday.

“On behalf of the family farmers and ranchers of the National Farmers Union, I thank you for your leadership in financial market reform,” Johnson write in his April 20 letter. “The legislation you have written will bring transparency, accountability and integrity to derivatives trading and will better regulate unfair manipulation of commodity markets.”

Lincoln’s legislation includes mandatory clearing and trading requirements and real-time reporting of derivatives trades that will close existing loopholes in the commodity futures markets. The legislation reins in financial players, like hedge funds and insurance companies that speculate in derivatives by creating centralized clearing and aggregate position limits. At the same time, it would provide exemptions from clearing and exchange trading requirements for legitimate commercial hedgers such as farmers, processors, utilities and trucking companies.

 “NFU members have voiced their support for reform because they know the importance of dynamic and fair financial markets,” Johnson said. “We are especially pleased with the sections of the bill that provide for aggregate position limits across all markets and appreciative of provisions that would deny any speculative interests the opportunity to exploit the end-user exemptions.”

The bill will be brought before the Senate Agriculture Committee on Wednesday for a mark-up during which members of the committee are expected to bring amendments. The Senate Banking Committee approved a similar bill in March and the House of Representatives passed legislation on the issue in December. The expectation is that the Ag Committee bill will be merged with the Banking Committee bill and that the combined bill will be brought up on the Senate floor as early as this Thursday.

NFU has come out in support of Senator Lincoln’s bill “as a means to bring common-sense oversight to the derivatives market to ensure that farmers, ranchers and rural Americans are not hampered by the unregulated activities of Wall Street.”

To read NFU President Roger Johnson’s April 20 letter to Senator Lincoln, go to: http://files.e2ma.net/5030/assets/docs/4_20_10_market_reform_letter_to_lincoln.pdf

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