By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — The National Assoc. of State Departments of Agriculture (NASDA) is calling on the Obama administration to put the brakes on the U.S. railroad industry’s exemption from federal antitrust laws and “inefficient regulations,” which the organization claims result in artificially high freight rail transportation rates for rural customers.

Pointing to a recent study by the USDA and U.S. Department of Transportation, NASDA adopted a resolution calling on Congress and President Obama to enact bipartisan freight rail reform legislation in the 110th Congress, on Sept. 30.

Two reform bills before Congress, the Surface Transportation Reauthorization Act (S.2889) and the Railroad Antitrust Enforcement Act (S.146 and H.R. 233), should be enacted as soon as possible, according to NASDA, which represents the secretaries, commissioners and directors of agriculture from all 50 states.
“The Midwest and West’s dependence on moving agriculture commodities from farm to market means that we need affordable, reliable freight rail and access to competitive rates,” stated Gene Hugoson, commissioner of the Minnesota Department of Agriculture.

“Excessive freight charges not only hurt American farmers, but also American families and consumers who are trying to make ends meet in this rough economy.”

Freight rail reform has been the focus of a D.C.-based advocacy group, Consumers United for Rail Equity (CURE), for many years. Chair Glenn English said railroads have been “getting rich at the expense of American consumers” by charging needlessly high rates for shipments to businesses with no transportation competition.
“Congress and the President can restore fairness by enacting rail reform this year,” English said.

The NASDA rail reform resolution stated that 75 percent of agricultural areas in the nation lost rail competition from 1992-2007, and that agricultural commodities historically have been charged higher rates than traffic with more access to competition. In addition, rail rates for moving oilseeds increased by 46 percent from 2003 to 2007, while rates for shipping other commodities increased by only 32 percent.

The U.S. Senate Commerce, Science and Transportation Committee released a report Sept. 15 that revealed examples of how the railroad industry paints a bleak picture regarding its finances to help stymie rail reform, but also touts strong profits to investors, according to CURE.

“This report shows the railroads will stop at nothing to fight off common-sense reforms that would protect American businesses and consumers,” said English of the report. “The railroads plead poverty to protect their monopoly and charge excessive rates for shippers, then turn around and boast of their strong profits to Wall Street.”

According to the report, the four largest U.S. rail carriers have nearly doubled their collective profit margin since 2000. English questioned whether any new government spending should be directed to the railroad industry, which would likely occur if Congress approves the President’s request for $50 billion for transportation infrastructure.

“Before Congress considers more funding for the freight railroad monopoly, they need to pass meaningful reform legislation that would protect consumers from the railroads’ monopoly pricing power,” he said.

Sen. Herb Kohl (D-Wis.), chair of the Judiciary Committee’s antitrust subcommittee, said if the current “comprehensive” rail antitrust bill stumbles in Congress, he will use “any means possible” to get a rail antitrust measure enacted, the Journal of Commerce reported Sept. 16.