Determining the Cost of Investing Nothing in Infrastructure

(WASHINGTON, DC) USDA recently released a significant new study that quantifies the cost savings and competitive advantages that would accrue from investing in long-delayed improvements to inland waterways locks and dams on the Upper Mississippi and Illinois River system. According to the National Grain and Feed Association (NGFA), the report concluded that “higher and consistent inland waterway funding is needed to ensure the long-term prosperity of U.S. agriculture.” Produced by Informa Economics for USDA’s Agricultural Marketing Service, the study analyzed the potential consequences of three different levels of infrastructure investment – status quo, reduced and increased. The status quo scenario envisions continued current spending trends in the president’s budget requests. The second scenario analyzed increased investment on the Inland Waterways System and the completion of all approved projects and rehabilitation projects required to increase the reliability of the locks and dams. The last scenario examined the impact of reduced investment with no new construction or rehabilitation. The study found increasing investment in the inland waterways system by $6.3 billion over a 10-year period (through 2029) and $400 million per year thereafter through 2045 cumulatively would grow U.S. gross domestic product by 20 percent (to $64.6 billion) and create 472,000 jobs. The study says this option would more than offset the cost of completing all the proposed projects and would increase the market value of corn and soybeans by $39 billion from what otherwise would be the case. Meanwhile, the reduced investment would decrease the market value of those commodities by $58 billion.