WASHINGTON, Dec. 21-“Knee-jerk” reactions are not the solution to the mess left in the collapse of MF Global, said American Farm Bureau Federation (AFBF) President Bob Stallman in an interview with Agri-Pulse.
“Any of us that have been involved in the commodity markets have always expected our margin funds to be segregated,” he said. “The first thing we have to determine with MF Global is what happened? Were there laws violated?”
If any people broke the law, those individuals need to be prosecuted, he said. If it is also determined that a lack of sufficient oversight existed, then the next step is to look at provisions that maintain the sanctity of customer funds.
“If the entire futures markets are going to operate for agriculture, we need to have confidence in the way they operate,” he said. “I don’t want to start talking about knee-jerk reactions until we fully understand what happened with MF Global.”
While responsible oversight of the financial markets needs to be ensured, Stallman maintained that even in this time of high, continual demand, the most significant issue impeding agriculture is over-regulation in a consistently volatile market.
“If we regulate ourselves more extensively and more unnecessarily than other countries, then agricultural production will move to other places,” he said.
Stallman said troubling regulations of the industry are in place and being enforced, including the Environmental Protection Agency’s (EPA) water quality regulations.
“There are real concerns, real costs and real threats from regulation," he said. "There are some that are potentially problematic. We have to be sure those proposing the regulations have a clear understanding of the way agriculture works.”
An opportunity to influence potentially harmful regulations exists in the public comment periods on proposed rules. For example, Stallman said the Department of Labor proposed rules restricting child labor in agriculture are significantly misguided, even though they exempt children in family farms.
“That’s true as long as you don’t have a partnership or a small family corporation or you’re not designed to operate like most of American agriculture is,” he said. “There are things like that where you have to try to fix the regulatory process.”
To hear a discussion of AFBF’s internal Farm Bill debates, go to http://www.agri-pulse.com/Audio-Tuesday.asp
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