Generations of people depend on Michigan’s agricultural industry. From dairy farms in the Thumb to the corn, soybeans, sugar beets and specialty crops grown across the state, our farmers and food processors help feed families both here at home and around the world.
It takes hard work, commitment, transparency and a dependable infrastructure to make all this happen. Freight rail is a big part of this system. Farming families in Michigan — including my own — have long depended on reliable transportation to get products to market and keep their operations running efficiently.
That is why the Surface Transportation Board’s (STB) recent decision to pause the proposed merger between Union Pacific (UP) and Norfolk Southern (NS) is exactly right.
When the STB initially reviewed the application, it found significant deficiencies. The companies resubmitted, but the revised application still contains gaps that are “concerning in their frequency and magnitude” and “lacks clarity and detail,” according to the board.
UP CEO Jim Vena dodged a question in a recent interview about the American Farm Bureau Federation’s concerns about the merger. Instead of a direct answer, he offered more vague promises around pricing with little information to back it up.
For a deal this consequential, UP and NS need to offer more than just vague assurances.
The proposed $85 billion merger would combine two of the nation’s largest railroads. A merger of this size could lead to steeper rates and fewer alternatives. For farmers operating in an industry where margins are often tight and costs are outside of their control, these concerns carry real weight. When rail rates increase or service becomes less reliable, farmers generally have little ability to adjust. Crops still need to move, livestock still need feed and processors still need ingredients delivered on time.
The American Farm Bureau Federation warns that additional consolidation could leave farmers with even fewer choices and less bargaining power. Transportation costs are a major factor in farm profitability, and producers often have little ability to absorb higher shipping costs when competition is reduced. In a state like Michigan, where agriculture remains one of our most important and diverse industries, the risk is simply too high.
Michigan agriculture supports a broad economic network well beyond the farm gate. The communities that rely on it deserve confidence that any merger will receive a thorough review and that companies will be required to address the potential impact on industry stakeholders — including truck drivers, equipment dealers, grain elevators, food processors and the small-town businesses that depend on a strong rural farm economy across Michigan.
In a free-market economy, mergers can create efficiencies and help companies grow. But they should also be carefully examined to ensure they are not upheld by false promises that could result in unintended consequences for the industries and communities that depend on them. There is too much at stake to rush this process or not give it the full attention it deserves.
The STB made the right call to demand more from UP and NS. When the companies refile their application, Michigan needs the STB to maintain that same rigorous scrutiny. This merger must prove it protects competition, maintains reliable service and genuinely serves the farmers, businesses and workers whose livelihoods depend on a healthy freight rail system. Michigan agriculture deserves nothing less.
Rep. Greg Alexander, R-Carsonville, represents Michigan’s 98th House District.
This article originally appeared on The Detroit News: Michigan farmers have too much at stake to rush rail merger | Opinion
Reporting by Greg Alexander / The Detroit News
USA TODAY Network via Reuters Connect
By Greg Alexander | USA TODAY Network
