WASHINGTON, D.C. — The U.S. Senate approved an amendment to its final version of the 2012 farm bill that would require the U.S. departments of Agriculture and Transportation to update their 2010 study of transportation issues, including the impact of freight rail pricing and service policies on rural America.

The Senate bill also requires the secretary of agriculture to participate in policy proceedings of the Surface Transportation Board (STB), which regulates freight railroad rate and service policies.

When the House takes up its version of the farm bill this week, agricultural shippers, including private and cooperative grain elevators, will be keeping a close eye on whether it includes those key components of the Senate bill in its legislation, according to Robert Szabo. He is executive director and lead counsel for Consumers United for Rail Equity (CURE), a Washington-based freight rail watchdog group consisting of rail shippers and their customers.

“(The components of the Senate amendment are) in the chairman’s mark for the House version,” Szabo said. “I’ve seen some language from it, but they won’t start working on (the House) version until July 11. But it is on the chairman’s version that he will lay down for the final House committee.”

The 2010 study by Transportation and Agriculture included “dramatic” findings relating to excessive costs farmers and customers are forced to pay because of captive shipping, or lack of competition, in the freight rail industry, according to CURE. The study alleged “considerable evidence” proved freight rail companies used excessive fuel surcharges to boost profits artificially, causing rural electricity consumers dependent on coal to pay significantly more for services, along with inflated rates for agricultural commodity shippers.

Updating the 2010 study within one year of the farm bill’s passage and at least every three years thereafter would provide rural rail shippers with quantifiable evidence to support their complaints against Class 1 freight rail companies, Szabo explained.

“It is important because there is a huge lack of data when it comes to the railroads and their rates, and the STB has not always been reliable and accessible. To have a database from a third party like the Department of Agriculture that quantifies the problems would be enormously helpful to shippers,” he said.

He added the database would allow agricultural shippers without access to competitive rail service to “make their case” to policymakers.

CURE maintains the Senate amendment’s strength depends on its mandate that the secretary of agriculture be actively involved with STB rulemaking affecting freight rail policy. “Some secretaries of agriculture want to participate in such proceedings and others don’t, so they need this directive,” Szabo said.

That directive actually restores a similar policy of USDA participation in transportation rate and service matters that hearkens back to the Agricultural Marketing Act of 1946, Szabo continued.

“At that time all modes of transportation were regulated,” he said. “As part of that act, Congress directed the (ag) secretary to participate. The law has not been changed since the Interstate Commerce Commission (ICC) went out of business in 1995. This amendment shifts the (role of the ICC) to the STB.”

The Senate amendment to the farm bill was sponsored by Sens. Amy Klobuchar (D-Minn.) and John Hoeven (R-N.D.).

“We encourage the House to also act to help protect farmers and rural communities from excessive freight railroad practices,” said CURE Chair Glenn English in a statement. “This action by Congress underscores the need for the STB to use its authority to reform outdated policies that have artificially limited access to competitive freight rail options for many domestic producers.”