y facilitating the recip-rocal movement of farm commodities andinputs, such as grainand fertilizer, the U.S. inland water-way system is crucial to theNation's agricultural sector. Its vitalrole is underscored by the fact thatmost of the Nation's agriculturalproduction occurs inland, far fromboth domestic and foreign markets.Covering more than 25,000 milesof navigable inland waterways (fig.1), the system contains: (1) theMississippi River and its tributaries;(2) the Columbia - Snake River sys-tem; (3) the Great Lakes - St.Lawrence Seaway; and (4) otherrivers, canal systems, and coastalwaterways.

Mississippi River

—Stretchingover 2,300 miles from its source inMinnesota to the Gulf of Mexico,this river is central to the Nation'swaterway transportation system,providing a critical link for themovement of bulk commodities.The Mississippi is comprised of twoseparate components—an upperportion, upstream from St. Louis,and a lower section downstream.Locks and dams are almost exclu-sively on the Upper Mississippi,between Minneapolis and St. Louis,because this portion is less naviga-ble in its natural state than thelower section of the river.Large-scale commercial use of the river began in the early 19thcentury (Fruin and Baumel), but itsutility was soon overshadowed bythe Erie Canal, which was complet-ed in 1825 and facilitated theeast-west movement of goods.Previously, goods were moveddown the Mississippi through NewOrleans and subsequently routedthrough New York City. Competitionfrom the railroads, along with thedifficulties of navigating an unpre-dictable river, kept the Mississippirelatively unused until the early20th century.By the 1930s, the Mississippire-emerged as an important routefor freight traffic. During the GreatDepression, the Federal Govern-ment undertook a massive con-struction project consisting of 28 locks and dams on the UpperMississippi. This, along with dredg-ing, greatly enhanced navigabilityof the waterway. Locks and damswere also constructed on many of the Mississippi's main tributaries,including the Illinois, Ohio, andArkansas Rivers. Navigability on theMissouri River, another importanttributary, was enhanced by straight-ening portions of it downstreamfrom Sioux City, Iowa.Today, agricultural products, inparticular, corn and soybeans, arethe primary commodities transport-ed on the Mississippi, accountingfor over half of all tonnage shippedon the upper portion (Casavant). In1996, nearly 55 percent of totalU.S. corn exports and 40 percent of soybean exports were transportedby barges on the Upper Mississippiand Illinois Rivers. Other importantcommodities served by this water-way system include fertilizer, coal,steel, cement, and petroleum prod-ucts (Bertels, 1998b).Having expanded its originalinfrastructure facilities, the UpperMississippi currently has 29 damswith 35 lock chambers (Casavant).The Illinois River, which flows intothe Upper Mississippi just above St.Louis, has an additional 8 locks.

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The Nation's InlandWaterway System andRural America

The Nation's inland waterway system

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the internal network of rivers and the Great Lakes - St. Lawrence Seaway, plus coastal waterways

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provides a low-cost means of transporting bulky goods over long distances. Inland waterways, critical in moving farm commodities, inputs, and other raw materials, face a number of challenges.These include the deterioration of many locks and dams, particularly on the Upper Mississippi - Illinois River system, and the controversy over the best use of the waterway system in the Pacific Northwest.

Dennis M.

Brown

Dennis M. Brown is a regional economist in theRural Business and Development Policy Branchof the Food and Rural Economics Division, ERS.

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The average age of this infrastruc-ture is approaching 60 years on theUpper Mississippi and is severalyears older on the Illinois (Bertels,1998b). Consequently, designcapacities for some locks and damshave already been reached. Forexample, current capabilities in thebarge "towing" industry allow a sin-gle towboat to push a tow of 15barges, which is approximately1,200 feet in length. However, onlythree locks are currently longenough to handle such tows. Theremainder of the locks have 600-foot chambers, so each tow must beseparated and "double-locked,"which is costly, time-consuming,and increases congestion on thewaterway.

Columbia - Snake River

—Thiswaterway, which flows throughlarge portions of Idaho andWashington and forms the northernborder of Oregon, has 8 locks and 8dams originally developed forhydroelectric production in theearly 1900s. The waterway's com-pletion in 1975 opened up interiorpoints in Washington, Oregon, andIdaho to commercial barge traffic.Agricultural products, mostlywheat, generally move downstreamon this river system, and accountfor 40 percent of all shipments (byweight) in an average year(Casavant). Forest products, whichalso usually move downstream,account for 15-22 percent of alltonnage shipped. Fuels and fertiliz-ers usually move upstream andaccount for over 80 percent of upriver traffic (Lee and Casavant).

Great Lakes - St. Lawrence Seaway

—Shared with Canada, thissystem comprises the five GreatLakes (Superior, Michigan, Huron,

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Source: Prepared by the Economic Research Service.Figure 1

Major river systems in the U.S.

The Mississippi is the Nation's most important waterway

TennesseeAlabamaArkansasCanadianChattahoocheeColumbiaHudsonIllinoisMissouriNorth PlatteOhioPlatteRedSnakeMississippiWillametteWisconsin

Erie, and Ontario) and the St.Lawrence River, and stretches over2,000 miles from Minnesota to theAtlantic Ocean. Agricultural prod-ucts account for about 40 percentof all its trade, with most grainproducts destined for export.Agricultural commodities shippedinclude wheat, corn, soybeans, bar-ley, oats, and flaxseed.The St. Lawrence Seaway wascompleted in 1959 at a cost of about $1 billion and providedMidwestern locations direct accessto overseas markets (Fruin andBaumel). Comprised of a series of locks on the St. Lawrence River andWelland Canal (which connectsLake Erie to Lake Ontario), the sys-tem allows oceangoing vessels and"lakers" (ships primarily confinedto the Great Lakes) a direct routefrom Duluth, Minnesota, at thewestern end of Lake Superior, tothe Atlantic Ocean.

Other Major Components

—TheTennessee - Tombigbee River sys-tem flows through Tennessee,Alabama, and Mississippi. In the1970s and 1980s, a series of locksand dams was constructed on theTennessee and Tombigbee Rivers,which opened up a 230-mile, 9-footdeep channel, and provided bargesfrom Appalachia with access to theGulf of Mexico (Fruin and Baumel).In addition, the New York StateBarge Canal System connects LakeOntario to the Hudson River. And,although not technically part of the inland waterway system, theAtlantic Intracoastal Waterway andthe Gulf Intracoastal Waterwaymake up the Intracoastal WaterwaySystem, which connects ports alongthe eastern and southern coasts of the Nation. It provides a protectedroute for a variety of ships, includ-ing pleasure craft and small com-mercial vessels, and stretches fromBoston, Massachusetts, to Browns-ville, Texas, with the Gulf sectionheavily used by the petroleumindustry.

The Federal Role in the InlandWaterway System

The role of the FederalGovernment has historically beento build and maintain the systemof locks, dams, and channels(Bronzini). Low-cost water trans-portation, it was argued, served theinterests of society as a whole andhence should be exclusively fundedby the Federal Government.The funding situation changedwhen the Inland Waterways TrustFund was set up in 1980 to receiveand disburse funds collected by anewly imposed fuel tax on bargecompanies. The tax is currentlyset at 20 cents per gallon and isdesigned to pay a portion (usually50 percent) of the cost of modern-izing locks, although current infra-structure needs are probablygreater than the available trustfund money. The remainder of infrastructure funding typicallycomes from Treasury funds, appro-priated to the U.S. Army Corps of Engineers, which oversees suchprojects. Operation and mainte-nance costs for locks, dams, anddredging are also usually paid forby the Federal Government (Bertels,1998b).The barge industry has benefit-ed greatly from this Federal invest-ment in waterways. Barges, whichoperate in a highly competitiveindustry characterized by very lowbarriers to entry, transport over half of domestically produced grainsand oilseeds destined for export,about 67.6 million tons in 1995 (fig.2) (Eriksen et al.). Barge transporta-tion is less important in the domes-tic grain and oilseed market,accounting for about 6 million tonsor 3 percent of domestic ship-ments. Altogether, barge transporta-tion accounted for about 19 per-cent of all grain and oilseed ship-ments in 1995, a ratio largelyunchanged since the late 1970s.

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50.9%38.1%11.1%

ExportDomestic

2.5%41.1%56.4%

Note: Totals may not add up to 100 percent due to rounding.Source: Eriksen et al.Figure 2