In Trains We Trust

In Trains We Trust
August 20, 2008

With the end of the current business sessions of the 110th U.S. Congress on the horizon, farmers across America and their representatives are doing their utmost to bring pressure on U.S. lawmakers to grant one more vital bill.

The average consumer has surely noticed that prices of food, both domestic and imported, have been on the rise. There are various reasons for the price hikes. However, one factor that has been common to most markets is the effect of high fuel prices.

How does the price of a barrel of crude oil from the Middle East affect the price of hamburger rolls made from U.S. grown wheat?

In factoring the wholesale and eventual retail prices of food items, transportation is a key factor. Local grown tomatoes sold at a farmer's market will have a much lower price than produce that has been shipped halfway across the country. On the other hand, supplying fresh daily produce to all corners of the nation is a luxury not enjoyed by many countries on this globe. Luxury, though, has its price tag.

Truck transport was the most common mode of long haul transportation until recently. The flexibility of routes, combined with the affordability of the transport mode, made trucking the choice of many farmers and suppliers. However, as trucking companies have been re-thinking the economic viability of long haul transport, railroad freight has become a realistic option. In many cases, trucking combined with rail freight has proven to be a successful combination.

Farmers across America have been relying more on rail service to ship their crops to the designated markets. Washington, D.C., though, has been making the economic reality of rail freight difficult for the farmers. In order for food prices to remain reasonable, rail prices must be reasonable. Antitrust exemptions granted to the freight rail industry allow the rail companies to charge farmers exorbitantly high prices. Removal of these exemptions would force the rail companies to become competitive and, thus, would reduce the rates and provide better service, also a complaint of the farmers. The lower rates would be passed on to the consumer. As many farmers rely heavily on the railroads, they feel that they are being held captive with no place to turn, and no other options.

The American Farm Bureau Federation has been pressuring members of the House and Senate to eliminate the Freight Rail Antitrust Exemptions. Senate bill 772 and House bill 1650 are companion bills that would make the antitrust exemptions obsolete. Farmers, growers, and consumers hope that the bills soon find a favorable place in the nation's law books.