WASHINGTON, D.C. – U.S. Senator Debbie Stabenow, Ranking Member of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, released the following opening statement – as prepared for delivery – at today’s hearing entitled Regulatory Issues Impacting End-Users and Market Liquidity.
Stabenow’s statement, as prepared for delivery, follows.
Thank you Mr. Chairman for holding this important hearing regarding issues facing end-users.
And thank you Chairman Massad and the end-user representatives for testifying today. As representatives of our nation’s growers, manufacturers, and producers, it is very important that we hear what is working and what is not working.
A little history – the Commodity Futures Trading Commission was established in October of 1974 when a great Michigan statesman – President Gerald Ford – signed the Commodity Futures Trade Commission Act into law.
As the Commission celebrates its 40th anniversary this year – it’s important to remember how we got where we are in the regulation of futures trading and consider what must be done to ensure the safety and soundness of this market moving forward.
In 1922 the USDA established an internal department – the Grain Futures Administration – to administer the Grain Futures Act.
It is important that the Committee reflect on this fact. The CFTC traces its history to a small agency within the Department of Agriculture and for good reason.
Before then, regulated futures were very much controlled by farmers and producers who used futures contracts to protect their harvest against unexpected price fluctuations and weather conditions.
But, we are far removed from those simpler days of agricultural futures, and that fact is evident when looking at the group of end-users with us today.
Every member of the Agriculture Committee takes great pride in supporting our nation’s farmers and ranchers, this responsibility and priority will never be in doubt.
However, I believe it is time that this Committee think beyond the CFTC’s roots and the agency that President Ford helped create in 1974 to replace what he believed was an inadequate regulatory system for the futures market.
The CFTC has become a premier global regulator. And it’s important that we acknowledge this reality by providing the agency with the tools and resources it needs to carry out its significant responsibilities.
As our country and economy continue to recover from the 2008 financial crisis, we must be committed to policies that protect taxpayers from risky financial practices that got us into this crisis in the first place.
Rather than trying to keep pace with the evolving markets; we must strive to be ahead of them. There is too much at stake. We cannot afford another crisis that causes the loss of even one job, let alone eight million.
Recent CFTC enforcement actions demonstrate this need. Both domestically and internationally, the CFTC is the cop on the beat.
The enforcement cases show that bad actors exist and will – as they have for many years – seek regulatory gaps that allow for the manipulation of market prices that affect everything from the bread on our shelves to the gasoline in our car.
As we move toward reauthorization, I look forward to working with Chairman Roberts and Members of this Committee in a bipartisan way to ensure that the CFTC is equipped with the tools it needs to foster open, transparent, and competitive markets, which will enable our nation’s end-users to manage commercial risk in a safe, reliable way.