The National Grain and Feed Association (NGFA) has urged Congress to reauthorize the Commodity Futures Trading Commission (CFTC), saying that the agency provides important regulatory oversight that benefits the grain, feed and processing industry as a primary user of agricultural products offered by regulated commodity futures exchanges.

But in testimony presented at a House subcommittee hearing, the NGFA encouraged the CFTC to provide greater legal clarity for innovative cash grain contracts that are exempt from regulation by the agency.

Under the Commodity Futures Modernization Act of 2000, Congress provided legal clarity for non-agricultural derivative contracts by stating that such contracts are legally enforceable after both parties executed the contract. But the NGFA said cash agricultural contracts "remain saddled with the risk" that either the CFTC or the courts may review a particular contract and declare it to be illegal and unenforceable, even after it has been duly executed by a willing buyer and seller. The NGFA said agricultural markets also should soon be "candidates for a more flexible and less-costly regulatory structure."

Source: Association Release