04.05.18

Chairman Roberts Keynotes CFTC Conference

OVERLAND PARK, Kan. – U.S. Senator Pat Roberts, R-Kan., Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, today keynoted the Protecting America's Agricultural Markets: An Agricultural Commodity Futures Conference. The conference was jointly hosted by the U.S. Commodity Futures Trading Commission (CFTC) and the Center for Risk Management Education and Research at Kansas State University.

“The Committee has held nearly 30 hearings and business meetings, including a recent examination of cryptocurrencies and the transformative potential the Blockchain may offer the economy as it is used to create more secure, transparent and efficient ways to trade and keep records,” said Chairman Roberts.

“Whether it’s market participants who rely on the CFTC to provide regulatory certainty, or consumer financial advocates who highlight the need for robust oversight of the market, everyone can agree we need a full panel of commissioners at the CFTC. As soon as the White House announces another CFTC nominee for the last vacancy, the Ag Committee will move as quickly as possible.”

“Like the Farm Bill, any CFTC reauthorization will not be revolutionary, but evolutionary, and an effort to provide long-term certainty to producers and other market participants. Any reauthorization should also include an update and authorization of an appropriate level of funding for the CFTC that is necessary for the Agency to function as a 21st century regulator.”

The Senate Committee on Agriculture, Nutrition, and Forestry, has jurisdiction over the CFTC and most recently held a hearing on Feb. 15 to examine pending rules, cryptocurrency regulation, and cross-border agreements. Chairman Roberts has used his oversight role to ensure the futures markets remain an efficient and valuable risk management tool for farmers and ranchers and other end users.

The following are Chairman Roberts’ remarks as prepared for delivery:

As both Chairman of the Senate Agriculture Committee, which has jurisdiction over commodity futures, and an alumni of Kansas State, I am honored to be a part of this conference.

A few years ago, during a weekend of town hall meetings here in Kansas, I spoke with a farmer who said something that really stuck with me. He said, “Pat, I don’t really care what you do to me in Washington, just let me know ahead of time.”

His statement really resonated with me because it spoke to the larger truth that so many Kansans, and all Americans for that matter, are seeking from their federal government – common sense, predictable policy decisions that allow them to successfully run their farms and businesses.

Whether we’re discussing trade policy, farm bills, or the important work of the Commodity Futures Trading Commission, the Senate Agriculture Committee’s primary task is to work for farmers, ranchers, growers and other stakeholders.

Without a doubt, the leading issue of importance to producers from all regions of the country is trade.  The futures market helps facilitate trade, and it is frustrating to see the announcements this week of Chinese tariffs on U.S. products, many of which are agriculture exports.

China represents one of the top export markets for U.S. agriculture.  According to USDA, in 2017, the U.S. exported nearly $20 billion in agriculture products to China alone.  

Drastic measures in trade policy result in harm to our producers in rural America.

History has shown us that agriculture far too often bears the brunt when retaliatory measures are taken.  And, clearly, history is repeating itself.

Over the last several years, China has purchased over 60% of U.S. soybean exports—over $12 billion in 2017.  And, after 14 years, U.S. ranchers regained access to the Chinese beef market just last year.  This is all at risk.

It won’t just be farmers and ranchers that are hurt by trade retaliation.  A Wall Street Journal article earlier this week noted that stock market gains attributed to passage of tax reform and the Administration’s regulatory relief efforts are being eclipsed by the President’s protectionist trade agenda.

Trade wars negatively impact jobs across all sectors.  Value-added agricultural products, such as ethanol and pork, support U.S. jobs in those respective industries. 

Simply put…the entire food value chain – producers, manufactures, and consumers, will ultimately pay the price.

We’ll be holding a hearing in the Finance Committee to look at the Chinese market. 

In light of the uncertainty these trade actions have in the marketplace, the Agriculture Committee has to act on the Farm Bill.

With that responsibility in mind, the Committee held nine Farm Bill hearings during the 115th Congress to ensure a comprehensive review of every title of the 2014 bill.

Beginning in Manhattan, Kansas, and then on to Ranking Member Stabenow’s home state of Michigan, and back through Washington, farmers, ranchers, growers, and other stakeholders shared their perspectives.

And now, we are in the process of making tough choices and writing a Farm Bill.

This year’s bill will be the seventh Farm Bill I’ve had the privilege to work on. Each one is certainly unique, and the conditions in which farm policy is crafted are never identical to previous bills.

A few goals that remain unchanged throughout the years are to produce a Farm Bill that is producer-friendly, provides certainty, is responsible to taxpayers, improves USDA programs, and is done in a timely manner.

Despite the challenges, road-blocks, or dust-ups in Washington, I am working to get a bill done on time.

There is a lot of work to do, but progress is being made towards crafting a bill that is sensible, and ultimately can get 60 votes on the Senate floor.

We must listen to our farmers and ranchers first. And, that is exactly what is being done. 

Throughout the Committee process, stakeholders delivered the message that the next Farm Bill needs to maintain and – where possible – strengthen USDA’s research, conservation, credit, trade, and commodity programs.

And, there is consistent support for crop insurance, which is so vital to helping manage the multiple risks faced by farmers on a daily basis.

There is also a need for a common sense approach and relief to a number of regulatory requirements and administrative red-tape for farmers, ranchers, growers and other stakeholders.  The bill will look at ways to ease some of those costs and burdens that affect their bottom lines.

In a time when there is a great deal of partisanship, it is fortunate that this Senate Committee has proven to be the exception.

This isn’t the first time Senator Stabenow and I worked on a Farm Bill.  In 2012, we worked together to produce a bipartisan Farm Bill, and we share the same goal in 2018 – a bipartisan Farm Bill.

The Agriculture Committee has a long history of overcoming serious challenges to get things done.

It’s clear that times are challenging right now in farm country.  Over the past five years, net farm income is projected to decline by 52 percent.   No matter what you grow or where you grow it, we are in a rough patch.

In fact, prices in Dodge City just yesterday were:

Wheat: $4.21 per bushel

Corn: $3.53 per bushel

Sorghum: $5.82 per hundredweight

Soybeans: $8.95 per bushel

For context, these all represent about a 40 percent drop from where prices were five years ago. 

At a time like this, there should not be revolutionary changes to existing programs. But instead certainty and predictability for producers across the country.

Farm Bill programs should also operate efficiently and effectively, and serve their originally intended purpose. 

And, now the challenge of accomplishing all of this at a time when budget resources are limited. There will need to be tough and thoughtful choices in reauthorizing programs and allocating funding.

There are a lot of questions surrounding the Agriculture budget. As you have seen recently, things are unpredictable. 

However, this bill is being drafted under the assumption that there will be no “new” money to spend in the 2018 Farm Bill.

The next CBO baseline update will bring greater clarity.  It is scheduled for release in a few days on April 9.

In addition to the Farm Bill, the Senate Agriculture Committee has also been addressing other issues during the 115th Congress.

The Committee has held nearly 30 hearings and business meetings, including a recent examination of cryptocurrencies and the transformative potential the Blockchain may offer the economy as it is used to create more secure, transparent and efficient ways to trade and keep records.

This hearing also highlighted some of the great work Chairman Giancarlo has undertaken during his tenure leading the Commodity Futures Trading Commission.

The Committee’s work has included vetting and acting on President Trump’s nominees to the Department of Agriculture, the Farm Credit Administration, and the CFTC as quickly and as efficiently as we have been able.  To date, the Committee has advanced 11 nominees received from the White House in a bipartisan fashion.

This includes the nomination of Dawn Stump to serve as a Commissioner of the CFTC.  She was reported out of the committee last year, and we hope to get her to the Agency soon.  The hold of her pending nomination has gone on long enough.

As soon as the White House announces another CFTC nominee for the last vacancy, the Ag Committee will move as quickly as possible. 

We need to get both Ms. Stump and a nominee to the other vacant position down to the CFTC in short-order.  It is imperative to get a fully functioning commission. 

Whether it’s market participants who rely on the CFTC to provide regulatory certainty, or consumer financial advocates who highlight the need for robust oversight of the market; everyone can agree we need a full panel of commissioners at the CFTC.

Beyond nominations and getting a Farm Bill across the finish line, is the reauthorization of the Commodity Futures Trading Commission, along with common sense updates to the Commodity Exchange Act.

The exact timing for tackling this issue largely depends on the Committee’s other demands, but hopefully this will be another example of the bipartisan nature of the Agriculture Committee.  

More specifically, I hope we can look to some of the Commission’s upcoming rule makings with the intent of making some of these fixes statutorily permanent in a reauthorization.

To that end, thank you, Chairman Giancarlo for your recent comments regarding de-minimis and position limits, and your intent to continue working with fellow commissioners to finalize rules for both of these important issues.

Like the Farm Bill, any CFTC reauthorization will not be revolutionary, but evolutionary, and an effort to provide long-term certainty to producers and other market participants.

Any reauthorization should also include an update and authorization of an appropriate level of funding for the CFTC that is necessary for the Agency to function as a 21st century regulator.

Unfortunately, the recent Omnibus appropriations bill decreased funding for the CFTC.  I will work with my colleagues as we begin discussing funding levels for 2019.  And, I will monitor any spending modifications the Agency is forced to make during the remainder of the current fiscal year. 

I greatly appreciate all of your partnership and counsel.  And, I look forward to continue working with you all as we work towards providing a regulatory environment that is both fair and predictable.

Thank you, for the opportunity to join you for the first of what I hope is many Ag commodity futures conferences between the CFTC and Kansas State.  

 

 

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