CFTC Commissioner Rostin Behnam affirmed the agency's commitment to serving the agricultural industry.
In remarks at the Michigan Agri-Business Association 2018 Outlook Conference, Mr. Behnam focused on addressing issues "truly unique to production agriculture." First, Mr. Behnam described the intersection of crop insurance to the futures market. He said that the futures market provides crucial reference prices that farmers rely upon, and insurance coverage determinations necessary for their business operations. He urged the CFTC and market participants to ensure that any issues, such as convergence of cash and futures prices, be addressed through "policy and practice."
Second, Mr. Behnam described continuing education efforts regarding the Farm Credit System – a network of borrower-owned lending institutions providing loans, leases and other services to farmers and others. According to Mr. Behnam, "accessible and favorable credit is even more vital today," due in part to low commodity prices, trade challenges and labor concerns.
Third, Mr. Behnam stated that CFTC staff continue to monitor block trading for agricultural futures products, which was launched on the Chicago Mercantile Exchange in January 2018. In its analysis of block trades in several agricultural markets, CFTC staff found that block prices appear to fall within the CME rule regarding "fair and reasonable prices."
Finally, Commissioner Behnam discussed the "regulatory landscape" created by Dodd-Frank, arguing that reforms mandated "ha[ve] made [the swaps market] safer, more transparent, and arguably more efficient." On that score, Mr. Behnam emphasized that he is "committed to continuing to defend the regulations that our predecessors – with the full input of the public – got right."
Commentary / Bob Zwirb
An unfortunate aspect of what is otherwise an excellent set of remarks by Commissioner Behnam relates to his concern regarding efforts to "uproot the regulatory landscape" adopted pursuant to Dodd-Frank – efforts that the Commissioner attributes to "the recent tide of populist sentiments and information asymmetries." There is quite a lot of very serious intellectual criticism of Dodd-Frank published and, to the extent that Commissioner Benham disagrees with this criticism, he should take on the intellectual debate and not avoid it by asserting it is merely the result of uninformed populist sentiments. He will find serious people – in many cases, serious people who are not inclined to populist sentiment – quite willing to engage in debate and discussion.
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