Transcript

Agricultural Advisory Committee Meeting, May 14, 1997

A staff white paper, entitled "Policy Alternatives Relating to Agricultural Trade Options and Other Risk- Shifting Contracts", prepared by the Commission's Division of Economic Analysis, will be released to the public at the May 14, 1997, meeting of the Commission's Agricultural Advisory Committee. Trade options are off-exchange commodity options which can be offered only to a commercial solely for purposes related to the commercial's business. Trade options on the basic agricultural commodities enumerated in the Commodity Exchange Act are currently prohibited under CFTC regulations. The white paper will analyze the functions of risk-management contracts, the current regulatory environment, recent developments in agriculture which have expanded the need for risk-shifting strategies, the benefits and risks of agricultural trade options, and potential regulatory restrictions to address such risks. Based on this analysis, the white paper will conclude with a series of staff recommendations for the Commission to consider concerning agricultural trade options.

Commissioner Joseph B. Dial, Chairman of the Agricultural Advisory Committee, noted that, in addition to a briefing by CFTC staff concerning the white paper, the Advisory Committee meeting will include: comments by staff members of the Senate and House Agriculture Committees on the proposed amendments to the Commodity Exchange Act currently pending before those committees; a report on USDA's risk management education program by Ken Ackerman, Administrator of USDA's Risk Management Agency; and a presentation by the National Cotton Council of America on their risk management education program. The Advisory Committee will also receive reports by Commission staff members on other relevant issues, including the status of delivery points for the Chicago Board of Trade's grain contracts and the Commission's new "fast-track" contract and rule approval process. There will also be a presentation on the Agricultural Advisory Committee's new internet website.

The meeting will be held at the Commission's Washington D.C. headquarters, at Three Lafayette Centre, 1155 21st Street N.W., in the first floor conference room, from 1:00 to 5:00 p.m., Wednesday, May 14, 1997.