Grain Subterminal Facilities

Subterminal facilities are used for the transient storage of bulk agricultural commodities located near the area of production which can accomodate unit trains or multiple care shipments. The development of subterminal grain elevator facilities has been sporadic throughout the grain-producing States and varies by State, crop, and the availability of alternative means of transportation. GAO responded to several questions concerning subterminal development.

Five subterminal feasibility studies have been either recently completed or are in process. The studies have been funded by Federal and State agencies and private sources. Grant funds are available through the Department of Transportation and other sources for comprehensive rail planning purposes, including subterminal facilities. The Federal Railroad Administration and the Farmers Home Administration (FHA) have grant and/or loan programs that could provide construction funds. Fundable activities include State rail planning and the cost of rehabilitating light density lines or constructing rail or rail related facilities in connection with such lines. An FHA program provides assistance to public, private, or cooperative organizations for the purpose of improving, developing, or financing business, industry, and employment and improving the economic and environmental climate in rural communities. GAO found that very little Federal funds have been used for subterminal and related facilities development. In areas where development has occurred, the member-owned banks for cooperatives and other private sources such as local banks and insurance companies have provided the necessary financing. There is a general lack of knowledge about available Federal programs that could provide study and construction funds. GAO found a wide variety of definitions describing subterminals.