USDA/RMA--RME Partnerships

RME Partnerships

Congress has adopted two provisions mandating the establishment of a crop insurance/risk management education program by USDA. Based on these mandates, the Risk Management Agency (RMA) is developing, conducting and evaluating a risk management education program based on a coordinated effort of Federal agencies and private groups. RMA has consulted with many of the potential partners in this venture: USDA's Cooperative State Research, Education and Extension Service (CSREES), the Commodity Futures Trading Commission (CFTC), a wide range of producer and commodity groups, the grain trade, futures industry organizations like the Chicago Board of Trade, crop insurance industry groups, and others.

The Commodity Futures Trading Commission

The Commodity Futures Trading Commission (CFTC) was created by Congress in 1974 as an independent agency with the mandate to regulate U.S. commodity futures and option markets. The agency protects market participants against manipulation, abusive trade practices, and fraud. Through effective oversight and regulation, the CFTC enables the markets to serve their important functions in the Nation's economy--providing a mechanism for price discovery and a means of offsetting price risk.

A futures contract is an agreement to buy or sell in the future a specific quantity of a commodity at a specific price. Most futures contracts contemplate that actual delivery of the commodity can take place to fulfill the contract. However, some futures contracts require cash settlement in lieu of delivery, and most contracts are liquidated before the delivery date. An option on a commodity futures contract gives the buyer of the option the right to convert the option into a futures contract. Futures and options must be executed on the floor of a commodity exchange--with very limited exceptions--and through persons and firms registered with the CFTC.

Futures contracts for agricultural commodities have been traded in the U.S. for more than 100 years and have been under Federal regulation since the 1920's. In the last 20 years, futures trading has expanded rapidly into many new markets, beyond the domain of traditional physical and agricultural commodities. Futures and options are now offered on many energy commodities such as crude oil, gasoline heating oil, and natural gas, as well as on a vast array of financial instruments, including foreign currencies, U.S. and foreign government securities, and U.S. and foreign stock indices. In addition, in recent years, new futures contracts have been offered in other non-traditional commodity areas such as electricity, seafood, dairy products and crop yields.

Cooperative State Research, Education and Extension Service

USDA's Cooperative State Research, Education and Extension Service (CSREES) is positioned for the 21st century as a dynamic change agent and international research and education network. CSREES expands the research and higher education functions of the former Cooperative State Research Service and the education and outreach functions of the former Extension Service. The result is better customer service and an enhanced ability to respond to national priorities.

In cooperation with our partners and customers, CSREES provides the focus to advance a global system of research, extension and higher education in the food and agricultural sciences and related environmental and human sciences to benefit people, communities, and the Nation.

USDA National Office of Outreach

USDA's new National Office of Outreach (NOO), which, through leadership and partnership with USDA agencies, ensures that information, technical assistance, and training is available to all USDA customers with emphasis on under-served populations, to assure they have full access to all USDA programs and services.