Regarding Rail Transportation Issues
                                           Release No. 0176.98 

Statement
                                
                              of 
               Agriculture Secretary Dan Glickman
              Regarding Rail Transportation Issues
                         April 20, 1998


       Of all industries, agriculture is perhaps the most fundamentally
dependent on an affordable, cost-effective railroad system.  For American
agriculture to compete in today's global farm economy, we simply must ensure
that we maintain an efficient and competitive railroad system.

       We know that competition among railroads has a strong effect on rates
for agricultural shippers.  As concentration increases and competition is
reduced, agricultural shippers pay higher rates, particularly those shippers
who are far from barge transportation.  That's why USDA strongly opposed the
Union Pacific- Southern Pacific merger, which continues to cause problems in
portions of the Western United States. 

       We also know that railcar shortages reduce the price farmers receives at
the local elevator and reduce American competitiveness in world markets.  No
matter how great a crop you have, no matter how high quality a product, if you
can't move it, you can't sell it.  Over 93 million bushels were stored on the
ground last year as a result of railcar delays, and we are greatly concerned
about a possible repeat of this scenario this year.  

       Given the importance of railroads for American farmers, USDA has been
extremely active in trying to address these issues.  We have made our Federal
grain inspections more efficient so they do not contribute to increased car
cycle times, and we have allowed emergency storage of grain under loan to the
CCC.  





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       We have also actively challenged the Surface Transportation Board to do
a better job of ensuring that railroads provide the level and quality of
service that American agriculture deserves.  Earlier this spring, we made 10
recommendations to the STB on improving railroad service and performance.  On
Friday, the STB announced that it was implementing some of these
recommendations, such as relaxing the standard for determining market
dominance and evaluating changes in revenue adequacy determinations to ensure
that rates are reasonable.  These actions are a welcome first step, and I want
to thank Surface Transportation Board Chair Morgan for her efforts.  

       USDA will continue to aggressively promote the needs of agriculture
before the STB and with the railroad industry.  For example, USDA is
particularly concerned about the vital role played by shortline railroads in
maintaining and enhancing service to agriculture.  We are hopeful that the
dialogue between shortlines and Class I railroads will be successful.   But we
also believe the STB must take appropriate administrative action to eliminate
paper barriers if an agreement cannot be reached.  

       We also intend to work closely with the agricultural community, the STB,
and the railroad industry to develop early warning indicators to identify
possible railcar needs in an attempt to avoid railcar shortages in the first
place. 

       USDA views the maintenance of a competitive, efficient railroad system
as one of the most fundamental priorities for American agriculture in the 21st
century.  To achieve this goal, we are developing a long-term agricultural
transportation strategy and intend to hold a national summit on transportation
issues facing agriculture later this summer.          

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