Potential Solutions for Improving Rural Infrastructure

agriculture

The development and maintenance of an efficient, reliable infrastructure system is critical to the success of American agriculture. To ensure that the necessary investments are made, Agri-Pulse and the Association of Equipment Manufacturers (AEM) recently held a Rural Infrastructure Summit to address challenges and propose potential solutions.


“Infrastructure is undoubtedly linked to agriculture and rural development,” says Leif Magnusson, the chairman of AEM and president of Claas Global Sales Americas. “Agriculture is the largest user of freight transportation in the U.S. An effective transportation system supports rural communities, reduces the cost for inputs, raises the value of crops, and increases access to markets.”

Unfortunately, the infrastructure that supports agriculture has experienced extreme wear and tear, and the available maintenance budget is shrinking. Rapid increases in fuel efficiency and alternative fuels present long-term challenges for the fuel tax, which is the main source of federal funding used for infrastructure projects. Populations are declining in rural counties, which lowers the tax base, and increasing property taxes to offset declines is extremely unpopular.

This has led to declines in the condition of rural roads and bridges. A recent report showed that 15% of the nation’s rural roads were in poor condition, another 39% were rated in mediocre or fair condition, and 26% of bridges longer than 20 feet in Iowa and Missouri are structurally deficient or obsolete.
You can read more about the state of rural infrastructure and revenue issues here.

What’s the good news in this bleak outlook?

Agriculture companies and industry associations are committed to finding innovative solutions for infrastructure development and funding.

For example, AEM is launching Infrastructure Vision 2050.
“We are seeking solutions for how grains and oilseeds will move from farm to market as efficiently as possible,” explains Magnusson. The crowd-sourced initiative is hoping to find “breakthrough solutions for how to fix U.S. infrastructure,” according to the group’s site. The top proposals will be presented to AEM and other industry professionals.

What could be on that list and how will technology play a role?

That’s a question that Trimble Senior Vice President Darryl Matthews asked a group of Trimble engineers before he presented at the Rural Infrastructure Summit.

“Instead of investments in additional road infrastructure, roads will need technology and connectivity,” he says. “Roads may cost more, but we will build less and put more capacity on them.” Other ideas from Trimble about how technology could impact infrastructure include:

• Autonomous vehicles that reduce the number of vehicles on the road.
• 3D printing provides an opportunity for local production of parts, decreasing the need for delivery trucks.
• Drone delivery could cut back on road traffic in urban and rural areas.
• Robotics has the potential to take over manual labor on farms, reducing travel from farm to field.

“Today, a farmer walks every field,” explains Matthews. “In the future, adding sensors and technology will allow farmers to manage more remotely and only walk to the exceptions.”

While technology will certainly play a role in the future of infrastructure, funding is a key concern. Panelists at the summit presented multiple ideas for this challenge.

Communicating with Policy Makers

Dedicating state and federal dollars to infrastructure will remain a key part of the funding puzzle. This means that elected officials need to understand the importance of infrastructure to agriculture, rural communities, and the country.

This has been a new initiative for CHS, the nation’s largest farmer-owned cooperative, not just on infrastructure, but on all issues affecting agriculture.

“Federal, state, and local policies impact everything we do,” says John Engelen, vice president of government affairs at CHS. “We can’t afford to sit back and be quiet, so CHS has embarked on a political awareness program.”

Most policy makers come from urban and suburban areas, points out Engelen, so agriculture risks becoming out of sight and out of mind.

“All of us have to be more proactive and reach out to elected officials, even those who may not agree with us,” he adds.

Part of CHS’s efforts include sharing a report with policy makers that shows the economic impact CHS has across the entire U.S. and to each individual state.

When Mike Steenhoek, executive director of the Soy Transportation Coalition, works with policy makers, he focuses on how issues impact local areas. “In my experience, the micro argument is more persuasive than the macro,” he says.

The Soy Transportation Coalition is working on a waterway report card that will be released this month. The report will show which elected officials represent specific locks and dams and will rate performance based on the percent increase in delays or closures.

“I don’t want lawmakers to say, ‘It’s the U.S. Army Corps of Engineers’ fault,'” explains Steenhoek. “The corps is in charge of maintenance, but Congress is in charge of funding, and they need to have a sense of ownership.”

While companies can do their part in this conversation, farmers also need to be involved. “Being a successful producer means you are willing to talk to policy makers about issues that affect you,” encourages Engelen.

Earmarking in a New Form

Amanda De Jong was working in Washington, D.C., when the decision was made to ban earmarks. The ban took away the ability to direct funds to specific navigation projects, resulting in a long list of approved waterway projects that don’t have the necessary funding available to be completed.

De Jong is now in Iowa working as the senior policy adviser for the Iowa Corn Growers Association, where she still keeps a pulse on the lawmakers on Capitol Hill. At the summit she said there is talk in the House of Representatives about bringing back earmarks, although in a different form.

“We won’t be able to go back to earmarks as we know them,” she says. “The question becomes how do we change the dialogue so these projects are marked as regional projects or economic hubs.”

Bringing in Private Funds

Another question De Jong posed to the summit: How can private investors be brought into the mix? “How will they see a benefit, and how can they work collaboratively with the government, who is unlikely to give up authority on the locks and dams?” she asks.

This is an area where CoBank has some experience.
CoBank, along with Capitol Peak Asset Management and the USDA, started the U.S. Rural Infrastructure Opportunity Fund to serve as a new source of capital for rural infrastructure projects.

“We look for different ways to finance projects, engaging the government and working with private parties who have the need for fixed returns,” explains Andrew Jacob, CoBank’s chief regulatory, legislative, and compliance officer. “There are challenges, but there are a lot of opportunities in that intersection of working with the USDA on a colending opportunity or bringing in an external investor.

“In the past three years, we are seeing partnerships we wouldn’t have seen before,” he adds. “There will be new models for finance, and we have to evolve.”