A National Forum on Agriculture and Transportation Linkages
Forum Proceedings

"Assessing the Importance of Transportation to Major Industrial Sectors of the U.S. Economy"

May 17-18, 2002
Ramada Plaza Suites
Fargo, North Dakota

Hosted by:
Upper Great Plains Transportation Institute
North Dakota State University

This work was sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration, United States Department of Agriculture, and the United States Department of Transportation; and was conducted in the National Cooperative Highway Research Program, which is administered by the Transportation Research Board of the National Academies.

Overview

Participants in the National Forum on Agriculture and Transportation, organized and hosted by the Upper Great Plains Transportation Institute in Fargo, North Dakota, May 17 and 18, 2002, focused on the proposition that a "competitive and complete transportation system is necessary for U.S. agriculture to maintain its competitive edge."

Forum sponsors included the American Association of State Highway and Transportation Officials, the U.S. Department of Agriculture, and the U.S. Department of Transportation, in cooperation with the Council of University Transportation Centers.

Forum presenters and participants came from government at all levels; the business sector, including representatives of producers, shippers and carriers of all modes, and the research community. The Forum keynote speakers were North Dakota Governor John Hoeven and U.S. Senator Kent Conrad.

Presentations and discussion at the forum highlighted new issues arising around agricultural transportation that are creating elements of a crisis. The new farm bill, homeland security needs, urban congestion around ports and infrastructure deterioration all point to the need for attention and action.

Overseas competitive investments, loss of rail lines and associated impacts on highway usage and condition all intensify the problem. The national economy is vulnerable to the health of the agriculture sector, and agriculture is vulnerable to the health of the transportation system.

Raw agricultural output constitutes only about 2 percent of the national gross domestic product, and the number of farms has decreased to about 1.8 million. Agriculture's share of the total U.S. economy, however, is about 7 percent, and if all related industries are included, almost 30 percent. But these figures do not tell the whole story. Other emerging sectors belong under the rubric of agriculture, or what might be called "natural resource-based industries." Agriculture is a leading source of U.S. exports and an important marketing "wedge" for other exports.

Agriculture and transportation are mutually interdependent. The agriculture sector is the largest user of transportation services in the nation. Agriculture could not respond to domestic and international needs without an efficient and effective transportation system, and agricultural products provide the volume of business that transportation modes need to develop and innovate.

U.S. production and consumption patterns are changing, with production following lower cost inputs and consumption following the national population shift to the southeast and southwest. A responsive transportation system must be available to serve as the connector and conduit for future movements.

The country depends on the services of the transportation sector, but changes that weaken the performance of that sector as it services agriculture can be seen. Both public and private providers and users need to search for improved investment commitments and levels. Investment dollars should follow the source of those dollars rather than be siphoned off for other needs. The loss of private investment in rail lines, deterioration of waterways, and trucking firm bankruptcies put even more pressure on the need for public investment.

U.S. agriculture has enjoyed an efficient transportation and marketing system that has enhanced its competitiveness in world markets. In view of improvements in competing countries' transportation and marketing infrastructure, it is important that the United States be vigilant regarding its transportation system to remain competitive. In the new global economy, system superiority is more important than product superiority. Transportation represents a critical value-added process within the agricultural supply chain.

U.S. agriculture is specialized. Each region produces a few things and imports many things. Without a high quality transportation system, each region would have to be more self-sufficient, with higher food prices, less selection, and less efficient uses of resources.

Institutional change, the way sectors and firms and business and government look at each other in their partnerships, is seen as the most cost effective approach to improve transportation capacity, with all sectors together in the need for a dynamic transportation system with new infrastructure and new information. Planning and partnerships are the path to achieving a transportation system that serves agriculture and an agriculture industry that serves the nation.