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Why You Can't Afford to Forget About Transportation

Why You Can't Afford to Forget About Transportation
Farmers could lose if too many people take infrastructure for granted.

One of the advantages soybean farmers in the U.S. still have today over Brazilian soybean farmers is transportation infrastructure, notes mike Steenhoek of the Soy Transportation Coalition. It's funded by nine state soybean boards. He's located in Iowa.

The advantage is no longer in yield or quality, he says. Brazilian growers can compete with America as it goes after world markets in those arenas. What drives up their cost is infrastructure- or lack of it. It's expensive to get grain to export facilities because of poor roads, bridges and other forms of transportation.

"However, I see that changing," he says. "Brazil seems ready to invest in infrastructure and make improvements. Here in the U.S., our mentality seems to be to spend on projects here and there, but not really invest for the future.

"If this trend continues, there could come the day when Brazil is no longer at a disadvantage on infrastructure either. That will make it harder to compete in the world market for our soybeans farmers."

Steenhoek is particularly interested in river transportation systems. The 1,200 mile inland waterway system in the U.S., with 240 locks and dams, ahs long been the envy of most other countries as far as transportation goes. But he's concerned that failure to invest tin infrastructure, and improve locks and dams in a systematic way, may threaten the future economic viability of the system.

Half of the money for repairs and maintenance of locks and dams in river channels comes from the barge industry. A form of tax is collected that goes into an industry fund that's used for these needs. Typically, Congress has matched the fund, and provided 50% of the appropriations for projects.

The problem, Steenhoek says, is that once politics is involved, it's not always a smooth process. There is no guarantee that Congress will appropriate the funds, at least not consistently. As a result, delays in projects and cost overruns become an issue. Some support measures that would make Congress more responsive and limit the ability to use the industry's share of money to bail out projects hamstrung by cost overruns that could have been avoided. However, it's unclear how much support this idea will get in Congress.

The McAlpin lock and dam project, built by the U.S. Army Corps of Engineers, was completed in 10 years. However, some other projects are well beyond that time frame, with significant cost overruns.

The coalition director urges farmers to stay abreast of these developments, and continue to impress upon their Congressman how important river transportation is, even though some have been beating that same drum for a long time.

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