Captive food growers seek more choices

San Francisco Chronicle
By, Marty Durlin
April 5, 2009

Development: Railroad reform legislation looms in Congress

What it means: After railroads were deregulated in 1980, more than 40 large railroads consolidated into just seven. Four of them - including the West's Union Pacific and BNSF - control 95 percent of the rail freight business. As a result, farmer Bruce Wright can use only one railroad to haul his wheat from Montana's Gallatin Valley to the West Coast. When the price of wheat fell to $2 per bushel a couple of years ago, Wright and others paid half the value of the grain just to haul it. There are "captive shippers" like Wright all around the West, paying rates up to six times higher than those who can choose between more than one railroad. Shippers can appeal to the Surface Transportation Board for rate relief, but it costs $140,000 just to file a case. For the fourth time in as many years, legislation has been introduced in Congress to regulate the railroad industry and reform the transportation board. And, according to economist Kevin Neels, "It has a better chance this year" because of the new political balance in Congress.