Chairman Selig Delivers Remarks at July 29 Agricultural Advisory Committee Meeting

Overview

Chairman Selig opens the July 29 Agricultural Advisory Committee meeting by noting that the committee has been restarted after more than two years. He emphasizes its long-standing tradition—sponsored by the agency chair since 1985—and frames his remarks as his own views, not necessarily those of the commission.

He places the agenda within a broader theme: government should regulate in ways that do not overburden taxpayers or stifle market innovation.

Core Argument: Critique of Post-2008 Financial Reform

Selig focuses on what he describes as negative effects of post–2008 financial reform—especially the Dodd-Frank Act—on agricultural commodity derivatives markets.

He argues that regulatory expansion has increased both the cost and complexity of participation for farmers, ranchers, and producers, including for hedging and risk management. He cites elements such as:

• New rules and expanded regulatory definitions
• Compliance obligations and administrative requirements
• Hedging requirements and position limits
• Swap data reporting
• The resulting need for legal and compliance resources

Selig claims that many rules have become:

• Duplicative
• Overly complex
• Unnecessary
• Difficult to enforce

He further argues these changes have contributed to market contraction (including a decline in the number of futures commission merchants) and increased friction for producers.

Implications for Competitiveness and Food Security

Selig warns that excessive regulatory burden could undermine:

• U.S. agricultural competitiveness
• Long-term food security

He cautions that if it becomes too difficult to operate in the U.S., more people may leave farming and the country could become dependent on foreign sources—potentially from adversaries.

Policy Direction: Targeted Reform and Reduced “One-Size-Fits-All” Regulation

Selig characterizes the commission’s direction as a move away from a “one-size-fits-all” approach toward deregulation and targeted reform. Key themes include:

• Removing rules that no longer serve a clear purpose
• Reducing red tape that harms productivity
• Reviewing regulations that impose unnecessary burdens

He also notes coordination with prudential regulators to ensure that bank capital requirements do not inadvertently reduce access to intermediaries that serve agriculture.

Transparency and Reporting Updates

The summary notes two transparency-related initiatives:

• Promoting greater transparency in commodity markets
• Shifting the Commitments of Traders (COT) report from weekly to bi-weekly publication, with an expected start by the end of the year

Enforcement Approach: From Technical Punishment to Substance

Selig says the commission has ended what he describes as a “campaign of regulation by enforcement.” He argues that enforcement should focus on:

• Fraud
• Manipulation
• Abuse

…rather than punishing minor technical missteps that do not meaningfully threaten market integrity.

Interagency Coordination and Producer Access

Selig emphasizes interagency coordination—specifically working with the U.S. Department of Agriculture through a memorandum of understanding—to improve producers’ access to risk management tools.

He concludes by stating that the advisory committee is essential for designing regulations that reflect the real-world needs of growers and industry practitioners. He calls for candid feedback to balance market integrity with the ability for businesses and producers to innovate, compete, and grow.

Presenters / Contributors

• Chairman Selig (speaker)
• Chairman Susan Phillips (referenced as original founder of the committee tradition)
• President Ronald Reagan (referenced in historical remarks)