As you are aware, September 30th was an important deadline for federal agriculture policy: it marked the expiration of the 2014 farm bill and the date by which Canadian, Mexican, and U.S. trade negotiators must come to an agreement on NAFTA reforms. We entered October with mixed results on those two goals.
Let’s start with the good news. Canada, Mexico, and the United States have agreed to a new trilateral trade agreement to replace NAFTA. After several years of low commodity prices and a nearly unprecedented level of trade uncertainty over the past year, U.S. farmers needed some good news on the trade front, and this new “USMCA” agreement with our North American trade partners is very good news. This USMCA trade agreement not only locks in the market opportunities previously developed with our North American neighbors, but it also builds on those trade relationships in several key areas:
- The agreement maintains the zero-tariff platform on all other ag products.
- For dairy farmers, it eliminates aspects of Canada’s dairy program (Classes 6 and 7) that had been used to undercut U.S. sales of dried milk products. Under the new agreement, U.S. dairy products gain access to an additional 3.6% of Canada’s dairy market (up from the previous level of about 1%), a move that is even better than the 3.25% we would have achieved under the Trans-Pacific Partnership the U.S. pulled out of last year.
- Canada will give the U.S. more access to its chicken, turkey, and egg markets, and British Columbia will allow the sale of U.S. wines at its state-owned liquor stores. Mexico agreed to allow imports of certain U.S. cheeses previous not allowed entry.
- Canada has agreed to grade imports of U.S. wheat in a manner no less favorable than their own. And Mexico and the United States agreed that all grading standards for ag products will be non-discriminatory.
- The U.S. – Mexico – Canada Agreement includes, for the first time, measures that address cooperation, information sharing and other trade rules among the three nations related to agricultural biotechnology and gene editing.
- The USMCA agreement is for sixteen years, with a review after six years to determine if the agreement should be extended another sixteen years. This is in place of the five-year sunset proposal, which could have been disruptive to long-term planning.
Overall, this was a hard-fought win for American agriculture, and we commend the U.S. trade negotiators for all the efforts to solidify the trading relationships we have with our North American neighbors. Farmers have worked hard to build markets and be reliable suppliers to both countries, and we are excited to build on those good trade relationships going forward.
Speaking of moving goods, this is a friendly reminder that Transporters of livestock and insects (typically commercial pollinators) are not required to have an Electronic Logging Device (ELD) in their vehicle. Transporters of other agricultural commodities also have an ELD exemption if they do not operate outside of the 150-mile radius more than eight days out of every 30. Drivers do not need to carry any documentation regarding this exemption. The statutory exemption has been extended through December 7, 2018, by the continuing resolution and will remain in place until further notice. Please take a moment to review the Federal Motor Carrier Safety Administration’s guidance document to ensure you are in compliance.
On a less productive note, September 30 also marked the expiration of the 2014 Farm Bill. We had hoped to see passage of a new five-year Farm Bill before expiration of the current legislation, but that did not come to fruition. From conversations with both the House and Senate, it has been made clear that they are committed to getting a farm bill done this year, and that progress has been made. It is critical that we continue to push for passage of a full five-year farm bill rather than an extension to the current legislation. An extension is a quick-fix that would give the industry a short-term solution but create long-term uncertainty for planning and implementing multi-year programs. All programs that do not have baseline funding would go unfunded under an extension. For example, without a five-year farm bill, the following programs would lose funding:
- Foreign Market Development Program (FMD.) The FMD Program helps create, expand and maintain long-term export markets for U.S. agricultural products.
- The Technical Assistance for Specialty Crops Program (TASC.) The TASC Program provides funding for projects that address sanitary, phytosanitary and technical barriers that prohibit or threaten the export of U.S. specialty crops.
- The Beginning Farmer and Rancher Development Program assists beginning farmers, ranchers, and foresters entering the industry and helps enable them for success through dynamic education, mentoring, and technical assistance projects.
- And many other non-baseline funded programs
The Farm Bill may not be addressed until a Lame Duck congressional session after Election Day. As you know, failure to pass a timely farm bill would have serious political and financial repercussions for Virginia’s farmers, and a one-year extension is not an ideal solution.
I encourage all VAFB leaders and members to talk to their Congressional representatives to build certainty of passing a Farm Bill. Click here for a one-pager to use during visits and/or calls with lawmakers between now and Election Day. The one pager includes recommended questions and statements on the Farm Bill to use as a guide during meetings with lawmakers.
Inclosing, you can see the federal programs and policies that directly impact agriculture are continuing to develop in both positive and negative ways. It is as important as ever that your Congressional representatives hear from you to understand, firsthand, how these policies and programs impact your operation. Thank you for your involvement in Farm Bureau and for serving as an advocate for Virginia agriculture.