Washington, D.C. (May 19, 2011)—New rules to bring transparency to the over-the-counter (OTC) swaps market need to preserve the ability of farmers and ranchers to use the customized risk management products offered by their farmer cooperatives, the National Council of Farmer Cooperatives (NCFC) said today. The comments came as the Agricultural Advisory Committee at the Commodity Futures Trading Commission (CFTC) met to discuss implementation of the Dodd-Frank Act and the impact that it could have on agriculture.
“Farmer co-ops offer their farmer-owners a number tools to help them weather the risk and instability inherent in production agriculture,” said NCFC President & CEO Chuck Conner. “The need for such tools has only increased in recent years as we have seen highly volatile markets for commodities and fluctuating prices for ag inputs. By offering customized, market-based products to their members to address these concerns, farmer co-ops continue to play their role as vital partners in the operations of producers across the country.”
“Written the right way, the CFTC’s rules implementing Dodd-Frank can ensure that co-ops are able to offer their members these important tools in a cost effective manner,” he continued. “Written the wrong way, the costs of new regulations could lessen the ability for cooperatives to help their members manage their risk.”
“It is our hope,” Conner concluded, “that the CFTC will keep in mind the implications for production agriculture, and write rules to ensure the continued competitiveness of America’s farmers and ranchers.”
Since 1929, NCFC has been the voice of America’s farmer cooperatives. Our members are regional and national farmer cooperatives, which are in turn composed of nearly 3,000 local farmer cooperatives across the country. NCFC members also include 26 state and regional councils of cooperatives. Farmer cooperatives allow individual farmers the ability to own and lead organizations that are essential for continued competitiveness in both the domestic and international markets.
America’s farmer-owned cooperatives provide a comprehensive array of services for their members. These diverse organizations handle, process and market virtually every type of agricultural commodity. They also provide farmers with access to infrastructure necessary to manufacture, distribute and sell a variety of farm inputs. Additionally, they provide credit and related financial services, including export financing.