Transportation & Infrastructure
Funding for the road, highway and bridge infrastructure across the United States has been flat. Meanwhile the cost to maintain, repair or replace roads and structures have increased dramatically over the past five years. Local communities and states are finding it difficult to properly maintain roads in order to meet public demand for safe roads as well as foster future economic development. For agriculture, the condition of the infrastructure is important to be competitive globally.
Roads and Bridges
Because the infrastructure is important to soybean and corn marketing efforts, the Indiana Soybean Alliance and Indiana Corn Marketing Council (ISA/ICMC) partnered to commission an analysis on Indiana’s transportation infrastructure in six key agricultural counties looking at how it impacts agribusiness economic development through grain elevators and terminal facilities, biofuel plants, livestock production and food processing.
When infrastructure impedes traffic and the delivery of commodities and products, such as a bridge closure or a weight limit is put on the bridge in the target counties, farmers delivering grain might have to take a 20 mile detour. With fuel prices demonstrating considerable volatility in the past few years, a detour can become quite costly for a farmer or the elevator who has to bid higher to attract grain.
Based on the analysis in this report, the impact of driving an additional 20 miles under a $2.00 per gallon diesel price environment is 2-cents per bushel for corn or soybeans. If the diesel price is sustained at $4.00 per gallon, the impact increases to 3-cents per bushel for corn and 4-cents for soybeans.
Enhancing transportation requirements and future needs starts at the local level. Engineers at INDOT inspect and assign a sufficiency rating to bridges. Even though a bridge may have a low ranking and be labeled as deficient and obsolete, the seldom used bridges on county roads are more likely to remain deficient and obsolete for a longer time despite the ranking. These bridges are then susceptible to weight limits that effectively restrict truck traffic from using the bridge, which lowers the profitability of agribusiness which use county roads.
Elevating suspect bridges and infrastructure to funding status starts by working at the local level with businesses and communities to highlight the value of the infrastructure to the county public works office and the state funding office. The infrastructure enables agribusiness to enhance local communities. The saying that “the squeaky wheel gets heard” is true. However, few communities are capable to organize and make enough noise to attract attention.
ISA and ICMC also commissioned Informa Economics to look at each of the state’s 92 counties. The Indiana Transportation and Agricultural Infrastructure report is a compendium of Indiana’s transportation and agricultural infrastructure at the state and county level. The major transportation infrastructure including roads, railroads, navigable waterways and bridges with a sufficiency rating of less than 80 were identified and mapped along with the agricultural features for each of Indiana’s 92 counties.
More on this research study can be found here
Over the past few years, issues related to rail transportation have emerged as major concerns to soybean farmers across the United States. Industry reports have indicated that soybean farmers’ profitability is being negatively impacted by the escalating costs associated with rail transportation.
The Indiana Soybean Alliance worked with other soybean checkoff organizations, producer and consumer groups to establish the Soybean Transportation Coalition (STC). The focus of this coalition is to address rail rate, service and capacity issues that affect soybean producer profitability and competitiveness. The main goals of the STC are to position soybean industry stakeholders to benefit from a transportation system that delivers cost-effective, reliable and competitive service and maintain a soybean industry coalition focused on immediate and long-term transportation issues and outcomes.
Indiana Soybean Alliance has two farmer-directors on STC’s board of directors. Currently Joe Steinkamp of Evansville, Ind. and Joe Tuholski of LaPorte, Ind. both serve
of the STC board. For more information visit http://www.soytransportation.org/.
The country’s inland navigation system plays a critical role in the nation’s economy, moving more than a billion tons of domestic commerce valued at more than $300 billion per year. In addition, more than one billion bushels of grain, or roughly 60 percent of all grain exports, move to export markets via the inland waterways each year. Investment in the Upper Mississippi and Illinois rivers has not kept pace with the needs of the transportation sector. The lock system is approaching 80 years old and cannot accommodate modern barging practices. The locks are outdated and deteriorating.
Locks and Dams
A long-term plan, such as the Capital Development Plan, which was formulated by the waterways industry and Corps of Engineers, is needed to improve the program management and provide a sufficient and reliable funding mechanism. Rep. Ed Whitfield (R-KY) and Rep. Jerry Costello (D-IL) have introduced H.R. 4342, the Waterways are Vital for the Economy, Energy, Efficiency, and Environment Act of 2012 (WAVE4), which would implement the Capital Development Plan into law.
The Capital Development Plan and WAVE4 are supported by industry stakeholders as a way to fund the navigation system. The proposal prioritizes navigation projects across the entire system, improves the Corps of Engineers’ project management and processes to deliver projects on time and on budget, and recommends a funding mechanism that is affordable and meets the system’s needs.
The recommendations add a cost-share cap on all new lock construction projects that would preserve the Inland Waterways Trust Fund by preventing the industry from
having to fund significant cost overruns. The plan also calls for an increase in the 20- cents-per-gallon fuel tax currently paid by the barge and towing industry to improve the future viability and efficiency of the inland waterways system.
The lock and dam infrastructure on the Mississippi River system has exceeded its intended lifespan, is deteriorating and in danger of experiencing a catastrophic failure. The WRDA of 2007 authorized $2.2 billion for construction of new 1,200-foot locks at Locks 20, 21, 22, 24 and 25 on the Upper Mississippi and at LaGrange and Peoria Locks on the Illinois River.
The authorized projects are supposed to be funded through annual appropriations and the Inland Waterways Trust Fund. However, little has been appropriated by Congress, the trust fund has a significant backlog, and a cumbersome and inefficient administrative process at the U.S. Army Corps has resulted in no progress on the modernization of the locks and dams on the Upper Mississippi River System.
Annual funding must be provided to ensure the Lower Mississippi River remains fully open for commerce. The inland waterways navigation system, especially the Mississippi River, is a vital asset in the movement of important commodities such as grain, coal, steel, petroleum and aggregate materials. Dredging of this critical artery must be maintained and there have been funding shortfalls over the past several years.
To address the funding for dredging, soybean and corn farmers through ISA and ICGA support the Realize America’s Maritime Promise (RAMP) Act (H.R. 104) and the Harbor Maintenance Act of 2011 (S. 412). The goal of these companion bills is to establish a firewall around the monies collected via the Harbor Maintenance Tax (HMT) for the Harbor Maintenance Trust Fund (HMTF). The bills require that all funds from the HMTF be used solely for dredging and harbor maintenance. The HMT is collected as an ad valorem tax of .125% on imported cargo arriving into the United States. Over the last decade or so only about half the funds collected have actually been appropriated for their intended purposes, including maintenance dredging of deep waterways. The HMT generates about $1.5 billion annually while Congress has appropriated an average of about $735 million, with the unused funds added to the general treasury and used for other non-maritime projects. If the HMTF was fully applied to the approved projects, as originally intended, there would not be an annual shortfall of funding to dredge our nation’s waterways