The collapse of MF Global, one of the country’s largest commodities brokers, is causing anguish across the farm belt.
Ranchers and growers use the commodities market to hedge against price swings.
With the trading firm’s failure, their money is locked up in bankruptcy proceedings. Some may be lost altogether. An estimated $1.2 billion in customer funds is reported missing.
The Wall Street Journal reports that the House Agriculture Committee, which has subpoenaed the company’s former CEO Jon Corzine to testify on Thursday, has been inundated by letters and calls from farmers and farm groups.
Some organizations have set up web pages for their members, with claim forms and information about legal representation. Members of these law firms, of course, are often lobbyists.
For instance, Arent Fox, outside counsel to the National Grain and Feed Association, is monitoring bankruptcy proceedings for the group.
CME Group, the futures exchange operator whose chairman is also testifying Thursday, has a central role as a bridge between its customers and government and bankruptcy proceedings.
In addition to its own lobbyists, CME Group employs Williams and Jensen, Davis & Harman, Cassidy & Associates, Delta Strategy Group, and Ogilvy Government Relations.
The commodities market has long been a focus of the farm lobby.
Organizations that have made government contacts on commodity markets issues in the past six months include not only exchanges and financial trade groups, but the Farmers’ Educational and Cooperative Union of America (better known as the National Farmers Union) and the Missouri Farm Bureau Federation.
MF Global filed for Chapter 11 protection on Oct. 31, so we’re apt to see more lobbying activity in coming reports.
Agricultural clients that have previously lobbied the Commodity Futures Trading Commission, which oversees the activities of MF Global and other brokerages, include:
- Agricultural Retailers Association
- American Farm Bureau
- Dairy Farmers of America
- Farmers Educational Cooperative Union of America
- National Corn Growers Assn
- National Cotton Council
- National Council of Farmer Cooperatives
- National Milk Producers Federation
- R-Calf United Stockgrowers of America