Rep. Austin Scott, Chairman of the House Agriculture Committee's Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture, held a public hearing to review the impact of enforcement activities by the U.S. Department of Labor (DOL) on specialty crop growers. Specifically, Subcommittee Members addressed growing concerns that DOL is using the "Hot Goods" provision under the Fair Labor Standards Act of 1938 (FLSA) in an arbitrary manner against producers of perishable agricultural commodities without regard for the inevitable destruction of the product and significant economic hardship inflicted on farmers and their employees.
Subcommittee Reviews President's Working Group Report
Washington, DC — Today, the House Agriculture Subcommittee on Risk Management, Research, and Specialty Crops led by Chairman Tom Ewing (R-IL) reviewed the findings of the President's Working Group contained in a committee-requested report on over-the-counter (OTC) derivatives and the Commodity Exchange Act (CEA).
"We are on an expedited time frame to pass CFTC reauthorization this year," Ewing said. "Now that banking modernization has been dealt with, it is time for the financial industry to move onto CEA modernization. While it may be difficult, we will make a strong attempt to craft legislation that is acceptable to all interested parties."
In laying the groundwork for CEA modernization, the Agriculture Committee has requested that the Commodities Futures Trading Commission (CFTC) provide a regulatory relief plan, that the Securities and Exchange Commission (SEC) and CFTC provide a plan to modernize the Shad/Johnson accord, and that the President's Working Group provide its suggestions for regulating the developing OTC derivatives market. Today, representatives from the Working Group, U.S. futures exchanges, OTC markets, and securities and option exchanges reviewed the Working Group's report.
Two of the major Working Group recommendations are to:
1) Exclude from the CEA bilateral transactions between sophisticated counterparties (other than transactions that involve non-financial commodities with finite supplies);
2) Exclude from the CEA electronic trading systems for derivatives, provided that the systems limit participation to sophisticated counterparties trading for their own accounts and are not used to trade contracts that involve non-financial commodities with finite supplies;
"The Committee hopes that this report and additional information from the CFTC and SEC will provide guidance in our reauthorization process," Ewing said. "I look forward to working with the PWG Members, industry, and other Congressional committees to craft legislation."