The House failed last week to pass the Commodity Markets Transparency and Accountability Act of 2008, which would have provided more transparency for the commodity markets.
“With the support of more than 290 members of Congress, including more than 75 Republicans, H.R. 6604 was well on its way to being passed over the two-thirds vote requirement, sending a clear signal that transparency and enforcement would return to the commodities and futures markets. Then Republican leadership demanded that members change their votes in order to protect President Bush,” said House Agriculture Committee Chairman Collin C. Peterson of Minnesota.
“H.R. 6604 is a bipartisan bill that passed the Agriculture Committee by voice vote,” Peterson said. “It is the product of a comprehensive series of hearings to examine the issues surrounding futures trading from all sides. And it clearly has enough support to pass this House.
“We will continue to pursue meaningful steps to address the conditions that have thrown some futures markets into disorder and hope that members will have the courage of their convictions to join us.”
The National Farmers Union also released a statement urging the House to continue to work on the bill. “It’s pretty clear that the markets are not functioning as they should,” NFU President Tom Buis said. “Without adequate oversight and transparency we will only continue down this slippery slope, leaving America’s family farmers and ranchers in jeopardy.”
Buis said this legislation would also address concerns producers have about speculation in the energy futures markets, a particular concern for agriculture producers whose input costs are directly related to U.S. and world energy prices.
“There are many reasons for high energy prices; this bill does not and cannot address all of them. However, it is a good step to addressing our concerns in the markets,” Buis said. “I urge the Senate to act quickly on similar legislation and the House to continue and work toward passing this necessary legislation.”
The NFU statement said the act, “would have required transparency and improved access; prevented excessive speculation by requiring the CFTC establish requirements limiting speculation; and strengthened the CFTC with legal authority and increased staffing to address oversight, surveillance and regulation.”
The bill’s proposals included:
• Revise the core principles applicable to position limits for contracts in agricultural and energy commodities to require position limits for speculators.
• Subject swap transactions, transactions for agricultural and energy commodities and large traders in over-the-counter contracts to reporting and recordkeeping requirements.
• Direct the CFTC to set position limits for any one person with respect to designated contract markets, derivative transaction execution facilities and electronic trading facilities; convene a Position Limit Agricultural Advisory Group and a Position Limit Energy Group; appoint at least 100 new full-time employees; review prior actions to ensure compliance with this Act; and review over-the-counter markets.