External Meetings: Definitions and Ag Swaps Teams Phone Call with Ron Eliason

Mr. Eliason stated his view that federal crop revenue insurance is the same as a swap, in that the insurance premium is the same as a swap’s fixed payment, the insurance payout is the same as a swap’s floating payment, and the insurance payout determination mechanism is the same as an embedded Asian lookback option.  He also offered his view that, since federally-backed crop revenue insurance is available to farmers irrespective of their income or assets, farmers should be able to enter into revenue swaps as well, even if the farmers do not meet the income or asset tests in the current definition of "eligible contract participant" and are therefore not permitted to enter into certain swaps.