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BNSF, Montana grain growers agree on ways to address rate disputes


Yesterday, BNSF Railway Co. reached an agreement with the Montana Farm Bureau Federation (MFBF) and Montana Grain Growers Association (MGGA) that provides the state’s wheat and barley producers a process to mediate and arbitrate rail rates. The pact gives farmers legal standing in rate cases for the first time, according to MFBF.

In addition to establishing a mediation process, the agreement calls for the formation of an arbitration panel, which gives grain producers legal status as railroad customers. Because no government agency is involved — the Surface Transportation Board typically arbitrates rate cases — rate disputes will be addressed quickly, efficiently and at a reasonable cost, MFBF said.

Wheat and barley producers served by BNSF will work with MGGA and MFBF to address rate concerns. If a complaint is determined to have merit, the farm groups will initiate a mediation process with BNSF. If an agreement isn’t reached within 30 days, a legal and binding arbitration process will be initiated.

A panel of expert arbitrators, mutually chosen by MFBF, MGGA and BNSF will hear the case, which must be completed within 120 days. The arbiters’ rate decision will be final and legally binding. If the decision adjusts the rate, the new rate will be in effect for one year and reparations may be awarded to the participating producers for the 14-month period prior to arbitration.

“This agreement gives the farmer methods to address a grievance on a rate issue, which was totally unavailable before,” said MFBF Vice President Bruce Wright in a prepared statement. “In everything prior to this, the mechanism for resolving differences was between shippers — meaning the elevators — and the railroads. The elevators just passed the costs on to the farmer.”

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More News from 1/30/2009