USMCA Takes Effect: Welcome News for Struggling Farmers
Oklahoma Farm Report
30 Jun 2020
The United States-Mexico-Canada Agreement (USMCA) goes into effect tomorrow, at a crucial time for farmers and ranchers struggling to recover from COVID-19 losses and a depressed agricultural economy. The expected $2 billion annual increase in U.S. agricultural exports and overall increase of $65 billion in gross domestic product will provide a welcome boost.
USDA estimates COVID-19 contributed to a $50 billion decline in commodity value alone for 2019, 2020 and 2021 production totals. This does not include all of agriculture’s losses, which would be billions more.
“The launch of the USMCA brings optimism to the country’s farmers and ranchers at a time they need it the most,” said American Farm Bureau Federation President Zippy Duvall. “We’re grateful for the opportunity to build on the success of the North American Free Trade Agreement, and we’re eager to see the results on America’s farms. It’s important that our neighbors uphold their end of the deal, so the agreement provides a stabilizing force amid the unpredictability of a pandemic in all three countries.”
Under USMCA, Canada will increase quotas on U.S. dairy products, benefitting American dairy farmers by $242 million. Canada will also treat wheat imports the same as domestic wheat for grading purposes. Mexico has also agreed that all grading standards for ag products will be non-discriminatory. The agreement also enhances science-based trading standards among the three nations.
USMCA is not a magic bullet...