River Transportation
Last updated: February 09, 2012
Farmers and ranchers have an enormous dependence on the U.S. waterway system. According to USDA, barges transport about 50 percent of all U.S. grain exports including around 68 percent of soybeans, 58 percent of wheat, and 65 percent of corn. The dependency between agriculture products and grain barges is reciprocal with waterborne transportation relying on field crops for 80 percent and agricultural inputs for 16 percent of its traffic.
Typical single unit tows on the Upper Mississippi River move about 22,500 tons, which is equivalent to about 225 rail cars or 870 tractor-trailer units. The topography of the Columbia-Snake system in the Pacific Northwest demands a greater need for dams and locks. Nonetheless, a single tow of three barges moves about 10,000 tons equivalent to 100 rail cars or nearly 400 trucks.
River transport of bulk and cargo containers of agricultural products is critical to many areas of the country. In addition to the crucial role that dams and locks play in the transportation of agricultural commodities, they are also critical in the nation’s energy mix as a source of clean energy. For example, in the Pacific Northwest, the Snake River and Columbia River dams generate 40 percent of the hydropower in the United States.
Many rural and urban communities rely on the river systems, ports, reservoirs, irrigation, and other structural components of dams. In recent years, significant investments have been made in these systems to accommodate fish passage and other wildlife issues. Indeed, most salmon recovery programs in the Northwest are financed by the Bonneville Power Administration, which spends $435 million a year on the effort. Ratepayers, including farmers and ranchers, are financing these efforts. On-going efforts will continue to address conservation and wildlife needs; but, the social fabric and economic reality of rural and urban areas rely on river way infrastructures
Much of the nation's imported and exported agricultural products are transported through port facilities linked to waterways and the nation's lakes and rivers. If we are unable to move agricultural products in an efficient manner, the U.S. will become less competitive in export markets and will lose domestic markets as well. Specifically, one of the United States’ biggest competitors, Argentina, recently invested more than $650 million in a dredging project. This project has lowered ocean freight rates paid by Argentine grain exporters. Furthermore, more dredging is planned. This, paired with government economic reforms encouraging grain production, will increase Argentina’s competitiveness in the world market and with U.S. product. China is also rapidly improving its waterway system.
Improvements in the U.S. waterway system are urgently needed. These aging structures can no longer accommodate the traffic volume or the physical size of today’s carriers. NASDA supports adequate funding and continued investment in these facilities for our nation's trade and food security interests. NASDA supports efforts to fund lock and dam maintenance and improvement programs necessary for the continued operation for safe and efficient commercial navigation on the U.S. rivers and lakes.
Under section 404(f) of the Clean Water Act, permits are not required for various activities, such as normal silviculture, as long as certain conditions are met. Section 404, which regulates the discharge of dredged and fill material into waters of the United States, is jointly administered by the Corps of Engineers and the Environmental Protection Agency. The Corps has additional authority to regulate obstructions, structures and activities under section 10 of the Rivers and Harbors Act of 1899 that impede the course, condition and navigational capacity of navigable waters. However, ongoing forestry operations in wetlands that qualify as "normal silviculture" under section 404(f) of the Clean Water Act have not been subject to the permit requirement of section 10 of the Rivers and Harbors Act. NASDA urges that the discharge of dredged or fill material into waters of the United States from normal farming, silviculture, and ranching activities such as plowing, seeding, cultivating, minor drainage, harvesting for the production of food, fiber, and forest products and including the placement and use of temporary structures for soil and erosion control protection, or upland soil and water conservation practices remain subject to section 404(f) of the Clean Water Act (33 U.S.C. 1344(f)), but not be prohibited by or otherwise subject to regulation under section 10 of the Rivers and Harbors Act (33 U.S.C. 403).
Rail Transportation
Last updated: February 09, 2012
Farmers and ranchers face unique challenges in the global market, and require a dependable and affordable means of transportation for their product. Weather, market conditions, and mergers have impacted the rail transportation industry causing grain car shortages, especially in the upper Midwestern States. Farmers and ranchers already operate on exceedingly low profit margins–this paired with dramatic fluctuations in world economies places them in a financially precarious environment that Congress has taken a special interest in addressing. Many farmers and ranchers are captive rail customers without logical or affordable alternative modes of transportation. Agricultural shippers in some parts of the U.S. are paying the highest rail freight rates for, arguably, the most sporadic and unreliable service. Agricultural producers need a clearly defined means for securing reliable service at a reasonable rate.
A review of the past 20 years of regulatory precedent demonstrates that rail regulators, faced with policy conflicts between competition and railroad industry revenue, invariably gave the rail industry’s bottom line preference. If Congress truly intended for competition to be the regulator of choice among rail carriers as well as with other modes this policy needs to be clarified legislatively.
Dramatic increases in grain export demands, rail mergers, and Commodity Credit Corporation’s (CCC) loan requirements are a few causes of grain car shortages. Most CCC loans are due at or near harvest time when the volume of new crops already overtax the system. CCC loans are also due when grain prices are typically at their lowest point during the year.
To address rail transportation inadequacies, NASDA encourages USDA to consider moving CCC grain into the market at various intervals and over a longer period of time to balance the shipping needs throughout the year. The Secretary of Agriculture should also be provided discretionary authority to extend CCC loans for up to six months for economic or other emergency reasons. We believe this increased flexibility in loan maturity could facilitate more orderly shipments of grain.
We also believe monthly rail shipper survey information should be published and that the Surface Transportation Board’s National Grain Car Council should implement a mechanism that permits shippers to seek nonperformance arbitration.
Congress should require rail carriers, upon request, to quote a rate between any two points on the system where traffic originates, terminates or may reasonably be interchanged without regard to whether the rate is for only part of the total movement. Also, upon request, small, captive agricultural shippers should be provided with a simple benchmark test for rate and service cases.
NASDA urges all railroads to charge reasonable rates and offer fair, consistent and equitable rate spreads, service, and treatment to all shippers. NASDA also encourages railroads to offer co-loading of trains, and to have reasonable loading policies that hold both shippers and railroads responsible for moving equipment promptly. NASDA believes that Congress and the Federal government should substantially increase oversight of railroads, including rates and services, where competition is not present.