USDA Transportation Cost Reimbursement — Payments for Geographically Disadvantaged Farmers and Ranchers
Legal Authority
- Section 1761 of the Food, Agriculture, Conservation, and Trade Act of 1990 (as amended) — Establishes the Geographically Disadvantaged Farmers and Ranchers program; authorizes USDA to provide transportation cost assistance to agricultural producers in geographic areas where transportation costs impose significant competitive disadvantages
- 7 CFR Part 755 — USDA Farm Service Agency implementing regulations; specifies eligible producers, covered commodities, reimbursable transportation costs, payment calculations, and application procedures
Key Mechanics
7 CFR Part 755 implements the Geographically Disadvantaged Farmers and Ranchers program, which reimburses a portion of excess transportation costs borne by agricultural producers who farm in geographic areas where remoteness significantly increases input and output transportation costs. The program primarily benefits producers in Alaska, Hawaii, and U.S. territories — areas where agricultural producers pay substantially more to ship inputs (seed, fertilizer, equipment) in and commodities out than producers in the continental United States. Eligible producers apply to their local FSA office and must demonstrate: (1) they are in a designated geographically disadvantaged area; (2) they incurred transportation costs for eligible agricultural inputs or outputs during the program year; and (3) the transportation costs exceeded reasonable benchmarks for non-disadvantaged producers. Reimbursements cover a percentage of the excess transportation costs above the benchmark, subject to per-producer payment limits. The program is funded through mandatory appropriations under the Farm Bill; payment rates and eligibility are set by FSA administrative guidance consistent with the statutory framework. As of 2025-2026, the program's funding status depends on Farm Bill reauthorization.
Current Rule (2026)
| Parameter | Value |
|---|---|
| Citation | 7 CFR Part 755 |
| Issuing agency | USDA Farm Service Agency (FSA) |
| Statutory authority | Section 1761 of the Food, Agriculture, Conservation, and Trade Act of 1990 (as amended) |
| Last major amendment | Program year: 2008 Farm Bill reauthorization |
What This Rule Does
Farmers and ranchers in remote or geographically isolated areas — Alaska, Hawaii, and small islands — face transportation costs that producers in the contiguous 48 states simply do not. Getting agricultural inputs (seed, fertilizer, equipment parts) to an island or a remote Alaska location, and shipping products to market, can cost multiples of what mainland farmers pay. This structural disadvantage undermines the economic viability of agriculture in these regions.
The Reimbursement Transportation Cost Payment (RTCP) Program addresses that imbalance by reimbursing geographically disadvantaged farmers and ranchers for a portion of their excess transportation costs. Seven CFR Part 755 governs who qualifies, what costs are covered, how reimbursement rates are set, and how FSA calculates individual payments.
"Geographically disadvantaged" is a defined term in the rule: it covers producers in Hawaii, Alaska, and certain U.S. territories and island possessions where physical distance from the continental United States creates measurable transportation cost disadvantages. The program is limited to producers who grow eligible agricultural commodities in substantial commercial quantities.
Key Provisions
- § 755.1 — The RTCP Program is administered by FSA under the general supervision of the Executive Vice President of CCC; county FSA offices handle local applications and payment processing
- § 755.2 — Definitions: "geographically disadvantaged farmer or rancher" means an eligible producer in Hawaii, Alaska, or a designated territory; "eligible agricultural commodity" means any crop or livestock product produced in substantial commercial quantities; "actual transportation costs" are documented freight, shipping, or transport charges incurred to move agricultural inputs or products
- § 755.3 — Application: producers must file a completed application during the program's enrollment period; applications are filed with the FSA county office for the county where the eligible commodity was produced; FSA reviews applications against acreage and production records
- § 755.4 — Eligibility: to qualify, a producer must (1) produce an eligible agricultural commodity in substantial commercial quantities in a geographically disadvantaged location, (2) have incurred qualifying transportation costs during the program year, and (3) be a U.S. citizen, resident alien, or qualifying legal entity with a financial interest in the commodity
- § 755.5 — Proof of costs: producers must document their transportation costs; for fixed or set rates, producers submit acreage and production records; for actual-rate payments, producers must provide invoices, receipts, or bills of lading documenting the exact transportation charges incurred
- § 755.6 — Funding: payments are made only when funds are available; FSA maintains a reserve to cover appeals and to ensure funds are available for the full program year; if total claims exceed funds, payments may be prorated
- § 755.7 — Transportation rates: FSA uses three methods to calculate transportation cost reimbursements: (a) fixed rates — a standard per-unit amount FSA establishes based on average costs for the commodity and location; (b) set rates — a rate established by FSA for specific transportation routes or modes; (c) actual rates — reimbursement of the producer's documented costs, used when fixed or set rates would not accurately reflect actual costs
- § 755.8 — Payment calculation: FSA multiplies the number of eligible units (bushels, hundredweight, head) by the applicable transportation rate, adjusted for the producer's ownership share; the result is the maximum payment before any reductions for other government payments received for the same cost
- § 755.9 — Fraud: producers who use a scheme or device to obtain RTCP payments to which they are not entitled, or who knowingly provide false information, are ineligible for all program benefits; FSA refers fraud to DOJ for criminal prosecution
- § 755.10 — Death or incapacity: if a producer dies, becomes incompetent, or disappears before receiving payment, FSA may pay the estate, legal guardian, or successor interest
- § 755.11 — Records: producers must maintain records supporting their eligibility and payment claims for three years from the final payment date; FSA may conduct spot-check audits during that window
- § 755.12 — Overpayments: producers who receive excess payments or payments based on incorrect information must repay FSA; joint holders of an eligible commodity are jointly and severally liable for repayments
How It Affects You
If you farm or ranch in Hawaii, Alaska, or a U.S. territory, the RTCP Program is designed to offset the transportation cost disadvantage that makes agriculture structurally more expensive in your location than in the continental United States.
Eligibility requires commercial-scale production. The program targets producers growing crops or raising livestock in "substantial commercial quantities" — hobby farms or very small operations may not qualify. FSA county offices can help you determine whether your operation's scale meets the threshold.
Three reimbursement rate options exist. If your transportation costs are unusual or higher than the fixed rate, request actual-rate reimbursement — it requires more documentation (invoices, receipts) but may yield a higher payment that better reflects your real costs.
The program covers both input and output transportation. Moving supplies to your farm and moving products from your farm to market are both potentially reimbursable. Keep freight bills, shipping invoices, and transportation receipts as they accumulate during the program year.
Maintain your records. FSA audits RTCP payments for three years after the final payment date. Keep all supporting documentation — acreage reports, production records, transportation invoices — organized and accessible for that window.
Statutory Authority
This rule implements:
- Section 1761 of the Food, Agriculture, Conservation, and Trade Act of 1990 (P.L. 101-624, as amended) — Established the RTCP Program and authorized reimbursements for geographically disadvantaged producers; the 2008 Farm Bill reauthorized and funded the program
- CCC charter authority — The Commodity Credit Corporation provides the funding for RTCP payments
Recent Rulemakings
No major amendments since the 2008 Farm Bill reauthorization. The program structure and rate-setting methodology have been stable.