AFIA submitted comment supporting the Commodity Futures Trading Commission (CFTC) proposed order to grant temporary relief until Dec. 31, 2011 of implementation dates for two categories of Title VII of the Dodd-Frank Wall Street Reform & Consumer Protection Act.
This extension specifically relates to rulemaking that includes the definition of a swap, swap dealer and other swap related terms, which are in process. This proposed action will delay the swap related provision of the Law, which are scheduled to go into effect on July 16, until Dec. 31 or earlier.
AFIA’s president and CEO, Joel G. Newman stated, “We feel this is a prudent move on the part of the CFTC to enable completion of the implementation process in an orderly way and to ensure current practices for bona fide hedgers and end-users of agricultural commodities are not unduly disrupted during the transition. We also strongly support and appreciate the Commission’s expressed intent to complete the implementation of the new rules within this new timeframe.”
Explained in AFIA’s letter, agriculture commodity markets were established to provide an efficient price discovery mechanism and a hedging/risk management tool for producers and end users. It is critical in this rulemaking and implementation process that bona fide end users and hedgers of agricultural commodities do not lose the efficient use of this important tool and that they are not subject to additional costs or burdensome regulations.
The U.S. feed industry is the single largest purchaser and user of feed grains and oilseeds, as well as processed meals and byproducts, as it works to supply America’s livestock and poultry farmers with quality feed critical to production of safe, wholesome affordable meat, poultry, eggs and milk. Moreover, because feed represents more than 70% of the on-farm cost of raising livestock and poultry, it is critical the grain, oilseed and ingredient commodity markets accurately reflect true supply and demand situations for these commodities.
AFIA looks forward to providing further comments and working with the Commission to ensure commodity markets remain an effective tool for the end users.