Tuesday the full House passed by a voice vote three agricultural measures including a bill reauthorizing livestock mandatory price reporting, Grain Standards Act and the National Forest Foundation. The House also approved reauthorization of the Commodity Futures Trading Commission (CFTC) on a party line vote of 246-171.
House Agriculture Committee chairman Michael Conaway (R., Texas) said his first goal as chairman was to have all reauthorizations taken care of before the deadlines passed this fall. “This completes our work in cleaning up the books of the House Agriculture Committee, addressing every item on the Congressional Budget Office’s (CBO) list of unauthorized appropriations under the Committee’s jurisdiction.”
The Commodity End-User Relief Act reauthorizes operations of the CFTC and makes basic reforms to ensure transparency and accountability while also helping farmers, ranchers and end users manage risks to help keep consumer costs low. The CFTC has operated without Congressional authorization for nearly two years. Many problematic provisions of the 2010 Dodd-Frank bill are addressed in the bill.
Last year House Agriculture Committee ranking member Collin Peterson (D., Minn.) had supported bipartisan efforts he led with then chairman Frank Lucas (R., Okla.) to move forward on CFTC authorization. However, this year Conaway’s attempts to roll back too many provisions of the 2010 Dodd-Frank bill will “roll back important financial reforms, curtail negotiations with foreign regulators and make it more difficult for the CFTC to do its job,” Peterson said.
The White House also had issued a veto threat on June 2, saying the bill would undercut CFTC’s own steps to address end-user concerns and “offers no solution to address the present inadequacy of the agency’s funding.” The administration prefers a fee on transactions regulated by CFTC.
The CFTC reauthorization bill was supported by 35 agricultural groups, including the National Grain and Feed Assn., which led efforts to write a letter of support to legislators ahead of the vote. The agricultural organizations supported the bill because it codifies customer protections to help prevent another MF Global situation. It also offers a permanent solution to the residual interest problem that would have put more customer funds at risk – and potentially driven farmers, ranchers and small hedgers out of futures markets by forcing pre-margining of hedge accounts. It also confirms that anticipatory hedging is considered bona fide hedging activity.
Grain Standards Act
The U.S. Grain Standards Act, which was first passed in 1916, authorizes the Grain Inspection, Packers and Stockyards Administration to establish official marketing standards for grains and oilseeds, and requires that exported grains and oilseeds be officially weighed and inspected. It also establishes rules for the voluntary inspection of domestic grain.
One of the main improvements in this year’s reauthorization addresses shortcomings which led to intermittent disruptions in official inspection and weighing service such as what happened at the Port of Vancouver, Washington in 2013 and 2014.
Particularly it brings more transparency and accountability to the process USDA uses to delegate to state agencies its authority to conduct mandatory official inspections at export facilities. In addition, the bill reiterates the responsibility for USDA to provide official grain inspection services at export elevators on an uninterrupted basis. The bill also includes an important change to the flawed formula now used by USDA to set user fees charged to export elevators, which NGFA estimates has resulted in up to $12 million in overcharges.
The Senate advanced its own Grain Standards Act bill out of committee with unanimous approval during a business meeting May 21. They made some additional changes beyond the House’s version as well as reaffirmed the role of the federal inspection service. The Senate bill also includes an important change to the flawed formula now used by USDA to set user fees charged to export elevators, which the National Grain and Feed Assn. and the North American Export Grain Assn. estimate will result in up to $12 million in overcharges during the current and immediately preceding fiscal years.
NGFA and NAEGA remain disappointed that neither the House or Senate version allows USDA utilize qualified inspectors employed by independent third-party entities to perform official inspections at export facilities.
Livestock mandatory reporting
The House also approved its bill on reauthorizing the Livestock Mandatory Reporting Act which allows producers and packers to access timely and accurate information regarding the price of the products they buy and sell.
Conaway said the reauthorization contains a number of industry-specific modifications proposed by the pork producers and sheep producers. It also included a provision that responds generally to industry concern regarding USDA’s arbitrary decision to shut this mandatory program down for several days during the lapse in appropriations that occurred in 2013 while other mandatory programs were deemed essential.