Freight rail industry discussed

By: Richard Fontenot

The American Farm Bureau Federation recently sent letters to members of the House and Senate, urging them to sign on as co-sponsors of legislation that would eliminate antitrust exemptions for the freight rail industry.

Two companion bills that would make obsolete antitrust exemptions that protect freight railroads from competition and therefore keep rail rates artificially and unfairly high. It seems to be the season for tackling the railroad industry, as earlier in the year Farm Bureau tackled the thorny issue of railroad crossings in the Louisiana Legislature.

“American agriculture depends on the railroad system, especially given the high costs of shipping commodities via truck,” said Bob Stallman, AFBF president. “Like those in several other industries, agricultural producers are frequently captive rail customers and experience both unreliable service and exorbitantly high rates from the railroads.”

The Louisiana Farm Bureau supported legislation that would require approval by both the Public Service Commission and the Commissioner of Agriculture when railroad companies close crossings that would impact access to farmland. While the details are still being worked out, Ronnie Anderson, president of the Louisiana Farm Bureau, says it’s a step in the right direction.

“We’ve made significant progress in getting railroads to work with us on this issue,” Anderson said. “We understand that for both safety and financial reasons, the railroads have to close some crossings. However, it cannot come at the cost of cutting off a farmer’s access to his own land. The legislation passed this year is big step forward in maintaining this access where railroads cross farm land.”

Meanwhile, Stallman is calling for passage of the Railroad Antitrust Enforcement Act before the 110th Congress completes its business this year.

“Farmers all across America rely on reasonably priced rail service to deliver their crops to market,” Stallman said. “Freight railroads must be opened to fair and open competition so that prices for shipping agriculture commodities via rail can be fair and reasonable.”

Antitrust exemptions granted to the freight rail industry allow rail companies to charge farmers and ranchers and other captive shippers exorbitantly high rates to ship agricultural products. Removing these exemptions is expected to force railroads to compete for business and to reduce the rates charged to captive shippers.