A. Vollmers

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transportation, rail cars, grain industry


Periodic shortages of rail equipment have freqnetly imposed marketing problems and costs upon the grain industry. For exumple, one study estimated the total cost due to the lack of transportation equipment was $2.36 million dollars for Iowa elevators in 1969. In spite of efforts to resolve the equipment problem through the private sector, these costs have persisted and led to attempts to seek relief through government intervention. During the 1980 legislative session, the South Dakota Governor suggested a new approach; the purchase of rail cars by the State to supplement railroad and elevator fleets. South Dakota is not alone in examining the purchase of rail cars. The Highway and Transportation Department in ilichigan has made a similar proposal. North Dakota recently concluded a feasibility study which explored the same alternative. And during October, 1979, the Province of Saskatchewan ordered 1000 covered hopper rail cars. The purchase of rail cars by a State to relieve equipment shortages is a new approach. But when past attempts to resolve a problem have rc1iled, public officials may be forced to venture into uncharted waters. This report is an attempt to assist decision makers in evaluating the probable success of this policy alternative.


Economics Research Report 81-1