Diverse interests within the U.S. agriculture sector including the American Farm Bureau and the National Farmers Union have agreed to join forces to stop the railroads’ monopoly stranglehold on rural America.
The groups are calling on Congress to pass reform legislation to end the railroads’ hidden tax on products shipped by rail. This hidden tax, which results from the railroads’ abuse of their monopoly power, hits farmers and rural America especially hard, because of their reliance on freight rail transportation for shipping and receiving goods.
“Rural America is getting fleeced by the railroads, one shipment at a time,” said Glenn English, Chairman of Consumers United for Rail Equity and CEO of the National Rural Electric Cooperative Association. “Rural areas are more likely to be served by only one railroad, and railroads use that unrestrained market power to drive up prices with overcharges on everything from grain shipments for food and fuel to coal for electricity.”
The American Farm Bureau and the National Farmers Union represent hundreds of thousands of rural agriculture producers in more than 30 states. Also weighing in with their support of rail reform legislation are the American Coalition for Ethanol, as well as the Alliance for Rural America, a broad 13-member coalition whose member organizations include the American Corn Growers Association, the National Farmers Organization, and the American Agriculture Movement.
These organizations have come together to support passage of the Railroad Antitrust Enforcement Act - H.R. 1650 in the House and S. 772 in the Senate. The legislation would end the railroads’ exemption from antitrust law, to which virtually all other U.S. businesses must adhere. This exemption allows railroads to avoid competition and therefore keep their shipping rates artificially and unfairly high, creating higher prices for U.S. consumers.
“America’s farmers and ranchers deserve a fair, competitive and transparent rail system,” said National Farmers Union President Tom Buis. “The rail industry’s increased consolidation has resulted in a lack of competitive services and higher transportation costs. Congress needs to act this year to resolve these issues.”
American Farm Bureau President Bob Stallman also called for Congress to pass the Railroad Antitrust Enforcement Act before it completes its work this year.
“American agriculture depends on the railroad system, and agricultural producers are frequently captive rail customers and experience both unreliable service and exorbitantly high rates from the railroads,” Stallman said. “Freight railroads must be subject to our nation’s antitrust laws so that prices for shipping agriculture commodities via rail can be fair and reasonable.”
The Railroad Antitrust Enforcement Act has passed both the House and Senate Judiciary Committees by a bipartisan voice vote. It awaits action by the full House and Senate.