House Agriculture Chairman Collin Peterson said Wednesday that when the farm bill is done he plans to hold hearings on the Commodity Futures Trading Commission and on management problems within USDA while keeping an eye on food safety proposals.
Peterson told the National Association of Farm Broadcasters he is disturbed by the influx of money into commodity markets and the CFTC's lack of interest in tighter regulation. Peterson said he wanted to hold a hearing on the situation, but CFTC officials had asked him to wait because they had planned a forum on the subject last month.
Farmers and agribusinesses have complained that commodity futures markets are not playing their historical role in price discovery and risk management. They have noted that institutional investors and hedge funds have recently poured money into those markets.
They asked CFTC to monitor the markets more carefully and impose new regulations, but CFTC commissioners at the April forum showed little interest in action. Questions have been raised about whether the new money in the futures market may have raised commodity prices, increasing the cost of food for processors in developed countries and for poor consumers in developing countries.
Noting that there was "a lot of disappointment" in that CFTC event, Peterson said "there are some real problems" in the commodity futures markets. Peterson said he believes that "the smart guys who were in the subprime [real estate market] sold short and saw the best opportunity in the commodity market. They ran this thing up and I think the prices are artificial."
Peterson noted that farmers are not getting these high prices because country elevators where farmers usually forward contract their grain have been unable to sign contracts at current high prices because the elevators have run up against their credit limits. Peterson said he believes that hedge fund managers believe the commodity market run-up is finished and are pulling out.
Peterson also said he wants to hold oversight hearings on problems he sees within USDA conservation programs and about the agency's continual requests for more money for computers.
Peterson said he has given up on his attempts to institute a universal, mandatory animal identification program until the Bush administration leaves office. He repeated his view that even though mandatory animal identification is not popular among ranchers it is necessary.
Regarding bills to restructure federal food safety programs, Peterson said, "I am not going to allow people to screw this up." Peterson said he believes USDA "does a good job by and large" on meat inspection, but that the FDA "does a terrible job" on its food safety responsibilities. FDA does not have "the resources, the facilities or the culture" to perform food safety tasks, Peterson said.
This article appears in the May 3, 2008 edition of NJ Daily.