Page:United States Statutes at Large Volume 102 Part 1.djvu/991

 PUBLIC LAW 100-387—AUG. 11, 1988

102 STAT. 953

hedging, and associated margin requirements for wheat, feed grains, and soybeans during the recent drought-related period of price volatility have had on producers and on grain marketers, particularly local elevators and intermediaries. (b) CONTENTS OF REPORT.—In the report, the Secretary shall include a discussion of— (1) the extent to which currently planted or stored crops are subject to cash forward contracts or otherwise are hedged, and what portion of such forward contracts are in danger of being defaulted on as a result of drought-related crop losses; (2) the extent to which local graiii elevators may experience severe financial stress due to de^ults on cash forward contracts or due to margin requirements on futures market positions; (3) the extent to which producers have been able to renegotiate forward contracts in light of drought-related changes in economic conditions; (4) the extent to which hedging and forward contracting practices may produce unusual demands for credit among farm producers and marketers in light of drought-related conditions; and (5) such other areas of related concern as the Secretary may find appropriate. (c) IMMEDIATE NOTIFICATION.—The Secretary shall immediately notify, in advance of the report, the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate if the Secretary finds, in the course of the study required under this section, that serious economic or financial problems related to forward contracting, hedging, and margin requirements for grains are likely to arise. (d) CONSULTATION.—The Secretary shall consult with the Chairman of the Commodity Futures Trading Commission on issues concerning futures markets that arise in the course of the study required under this section. SEC. 335. RURAL ECONOMIC DROUGHT.

DEVELOPMENT

RESPONSE

TO

THE

(a) FINDINGS.—Congress finds that— (1) the disastrous drought of 1988 is adversely affecting a large number of States, with serious economic consequences for family farmers; (2) the harm caused by the drought is not limited to farmers, but extends to each rural community whose economic viability is being devastated; (3) rural businesses and financial institutions are already experiencing the negative effects of decreased sales, and they anticipate severe problems over the next year, due to crop failures and the unavailability of credit; (4) local rural governments, whose fiscal bases depend on tax revenues from agriculture and agriculture-related businesses, will experience, as a result of the effects of the drought, difficulties in providing services that are important to the quality of life for rural residents; (5) as a result of the effects of the drought, significant savings will accrue to the Federal budget due to reduced deficiency pa5Tnents and storage payments, substantially in excess of the funds allocated by this Act; and

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