DANGER SIGNALS SIGHTED FOR FARM INFRASTRUCTURE

DANGER SIGNALS SIGHTED FOR FARM INFRASTRUCTURE

The U.S. agricultural export marketing and transportation infrastructure is in danger of deteriorating because of sluggish export growth, economists with the Federal Reserve Bank of Kansas City said.

U.S. agriculture needs strong trade growth to flex its greatest competitive muscle, which comes from an efficient marketing and transportation system, the economists, Alan Barkema and Mark Drabenstott, said.In a new research paper published in the Kansas City Federal Reserve Bank's Economic Review, the economists write that U.S. agriculture's infrastructure aids competitiveness only when export volumes are large.

Unfortunately, they said, U.S. agricultural exports have fallen to a level that doesn't utilize the infrastructure advance, which threatens the viability of that infrastructure and the competitiveness of U.S. agriculture in the world marketplace.

The infrastructure is in some jeopardy, the economists indicated, with only half of the transportation network fully used, because of a sharp decline in export volume.

Grain industry analysts estimate that the U.S. transportation system - which was expanded to accommodate the large volume of grain moving from farm to export terminal in the 1970s - could support grain exports of nearly 200 million tons.

From a burgeoning grain export trade in the late 1970s (approximately 100 million metric tons of wheat and coarse grains), the U.S. portion of world grain exports slumped by about half that amount during 1985.

Transportation costs in the United States have been shown to be roughly the same as those in Canada and the United Kingdom, the economists noted, and slightly less than those in other competitive countries such as Argentina and Australia.

In addition, Mr. Barkema and Mr. Drabenstott said they believe the United States must remain in the forefront of new agriculture technology to be competitive suppliers to the world.

To that extent, they say, the U.S. is making comparatively smaller

investments in research than some competitors.

Maintaining production efficiencies depends on a steady stream of

innovative production technologies from the industry's research and development infrastructure, they say.

The United States is believed to hold a lead over other countries in developing and applying biotechnologies, the newest and one of the most promising areas of agricultural research.