GLICKMAN ANNOUNCES SUPPORT OF STB DECISION ON RAIL SERVICE AND ACTIONS TO      
ALLEVIATE SHIPPING PROBLEMS


                                                               
                                            Release No. 0396.97



                                   Tom Amontree  (202) 720-4623
                                             tamontree@usda.gov
                                   Jerry Redding (202) 720-6959
                                              jredding@usda.gov




GLICKMAN ANNOUNCES SUPPORT OF STB DECISION ON RAIL SERVICE AND ACTIONS TO    
  ALLEVIATE SHIPPING PROBLEMS

     WASHINGTON, Nov. 7, 1997--Agriculture Secretary Dan Glickman today
announced his support for the emergency action taken by the Surface
Transportation Board to ease rail congestion in the western United States
and announced measures being taken by USDA to alleviate shipment
disruptions.  

     The STB has directed the Union Pacific/Southern Pacific railroad to
allow other rail carriers to provide service over UP/SP lines in the South
Texas area to relieve congestion.  The Board also has accepted Glickman's
recommendation that additional information be required of the railroad so
that agricultural interests can determine whether service to agricultural
shippers is actually improving.

     "We hope that the emergency action the STB took in the South Texas
area begins to alleviate some of the serious car shortage and railroad
service problems in the major grain producing areas of the Midwest which
have led to grain storage problems," Glickman said.

     "Storage problems are the most severe in Kansas, where as much as 20
million bushels of sorghum and corn are being stored on the ground," he
said.  "Requiring the UP/SP to submit the data we requested certainly gives
agricultural interests more of an ability to monitor whether railroad
service to agricultural shippers is actually improving."

     The actions being taken to alleviate disruptions and reduce
transportation demand pressures include: extensions of delivery times for
commodities purchased by CCC under food donation programs, approval of
emergency storage for Commodity Credit Corporation controlled grain, and
improvements in the timeliness of federal grain inspections at loading
facilities.

     Glickman said he also has sent a letter to the chief executives of
major U.S. railroads expressing his serious concerns about the current
problems and the long term ability of the rail system to meet the demands of
the agricultural sector.  "With the next millennium just around the corner,
it is time that we all begin to give more careful consideration to the long
term transportation needs of the nation's agricultural shippers."

     Glickman said he has instructed Micheal V. Dunn, assistant secretary
for marketing and regulatory programs, to develop a comprehensive, multi-faceted plan that will address the long term transportation needs for all
agricultural commodities.

     

     "Reliable and cost-effective railroad service is essential for U.S.
agricultural producers and shippers to compete in domestic and international
markets," Glickman said.  "Nearly half of all grain produced in the United
States moves to market by rail, and agricultural shippers pay over $3
billion annually in rail freight costs." 

     UP/SP has been plagued by operating problems as it attempts to
integrate the Union Pacific and Southern Pacific systems following a 1996
merger.  Service problems include the inability to provide adequate grain
cars and shortages of locomotives and train crews.  These problems are
causing grain to be stored on the ground, are causing delays in feed
deliveries to livestock producers, and are limiting the ability of shippers
to move grain to export positions.

     USDA also announced that distress loan programs may be initiated by
state Farm Service Agency committees where grain cannot move to terminal
markets and sufficient local storage space is not available.  Distress loans
are recourse loans for a maximum loan quantity of 75 percent of the eligible
quantity and mature no later than 90 days after disbursement.  Producers may
repledge loan collateral before maturity as a 9-month loan by repaying the
distress loan at principle plus interest and moving the loan collateral into
eligible farm or warehouse storage.

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