National Farmers Union President Tom Buis appeared before the House Agriculture Committee yesterday to support the idea of increased commodities' market oversight and transparency. Buis cited last year's record high commodity prices, followed by a historic collapse in the grain, livestock and dairy prices, as an example of unabated speculative commodity futures trading that is increasing market volatility.
"Speculators created a market bubble and false sense that higher prices were here to stay, as a result producers locked in higher priced input and feed costs. The economic collapse and bursting bubble have jeopardized the economic livelihoods of many Americans and is rippling throughout our rural communities," Buis said.
He commended the committee's commitment to addressing market speculation and increase transparency and called for passage of the Derivatives Markets Transparency and Accountability Act of 2009.
"This legislation will increase transparency in the commodity markets, allowing for an open process that will keep the public apprised of those involved in commodity markets," Buis said. "The Commodity Futures Trading Commission will finally have the necessary tools to ensure markets remain open, fair and transparent."
Buis commended the legislation's requirements for transparency when considering prospective over-the-counter transactions and requirements for CFTC to study and report on the effects of potential position limits within OTC trading.
"This information will enhance the public's confidence that markets are not being manipulated, fraudulently exploited or overwhelmed by speculation. And if so, corrective action can be launched," he told the committee.
To read the testimony, click here.