LIHU‘E — The U.S. Department of Agriculture recently announced a program that partially reimburses shipping rates to “geographically disadvantaged” farmers and ranchers. The program reaches out to farmers and ranchers from Hawai‘i, Puerto Rico, Alaska, the U.S. Virgin Islands and
LIHU‘E — The U.S. Department of Agriculture recently announced a program that partially reimburses shipping rates to “geographically disadvantaged” farmers and ranchers.
The program reaches out to farmers and ranchers from Hawai‘i, Puerto Rico, Alaska, the U.S. Virgin Islands and any U.S. territory in the Pacific Basin.
The USDA office in Lihu‘e started receiving applications Aug. 3. The deadline to apply is Sept. 10.
“Our agency will reimburse part of the farmers’ and ranchers’ transportation costs,” said Robert Ishikawa, USDA county executive director.
The cost of freight reportedly affects the vast majority of Kaua‘i farmers, even if they sell their produce locally.
The Reimbursement Transportation Cost Payment Program offers local farmers and ranchers reimbursement for shipping costs of produce, and also for shipping costs for imported supplies associated with farming production, such as fertilizers and feed.
The cost of importing machinery and automobiles, as long as they are associated with production, may also qualify for reimbursement. Qualifying applicants may also get reimbursed almost 4 cents a gallon of fuel.
The program covers expenses during the current federal fiscal year, which is Oct. 1, 2009, to Sept. 30, 2010.
“This is one program we finally can help out the farmers and ranchers here,” said Ishikawa, adding that all farmers have to do is provide copies of the receipts that qualify for reimbursement.
Ishikawa said two local farmers already applied and qualified for the maximum allowed cap of $8,000 reimbursement per applicant.
The USDA set aside $2.6 million for this program. If each applicant receives the maximum amount each is allowed to, then 325 applicants would qualify. But Ishikawa said not all farmers should get the maximum allowed reimbursement, so many more may benefit.
Ishikawa said he expects 20 to 30 Kaua‘i farmers to apply for the reimbursement.
Those farmers who have already finished their applications had some major shipping charges, according to Ishikawa, making the processing job easier. They had approximately 20 receipts each.
Small farmers, however, might have hundreds of receipts, which they will have to separate themselves. But before they do anything, Ishikawa said they should come to the USDA office, where he can go over the application and program requirements.
One of the eligibility requirements is that a farmer cannot exceed an average of $500,000 in non-farming income for three consecutive years, Ishikawa said.
Ishikawa advised farmers and ranchers to come in early to allow enough time to go through the process.
“We are really on a short leash right now as far as taking the applications,” he said.
The application process could be time consuming because all receipts have to be broken down in different categories because of the different reimbursement rates.
Applicants will likely be able to claim supplies that they bought locally because shipping charges are hidden, said Ishikawa, adding that a chart sets fixed shipping rates for different products that have hidden shipping costs.
Under that chart, for example, liquid chemicals cost $5 per gallon to arrive in Hawai‘i, liquid fertilizer costs $1.40 per pound, and dry fertilizer costs 15 cents per pound. Qualified applicants would get 25 percent of those costs reimbursed, as long as they have receipts to show for it.
The chart also sets the price of exporting cattle as $200 per head. Each qualifying applicant would get $50 back per head.
A USDA official said Kaua‘i ranchers export as many as 6,000 cattle a year to the Mainland, where they are fattened with grain and slaughtered. The final grain-feeding softens their meat, making it USDA-choice certified.
Kaua‘i residents import from the Mainland the equivalent of 12,000 carcasses, the official said.
Unfortunately, many Kaua‘i ranchers may be unable to receive reimbursement from the USDA because the Mainland buyers sometimes drop the prices they would normally pay for the cattle to offset shipping charges.
So even though many Kaua‘i ranchers may take a loss for selling their cattle at a cheaper rate, they have not paid shipping charges upfront and would be unable to produce receipts that would qualify them for a reimbursement, said Ishikawa.
In case farmers feel they do not qualify for this program, Ishikawa said they should come in to the office anyway because there are several other programs that might be helpful.
“We’ve got a great loan program that we can help farmers and ranchers,” he said.
Many farmers and ranchers may think the paperwork is hard, Ishikawa said, but in a couple hours of work they may be able to save a few thousand dollars.
“In the real world, where are you going to get that much money in a few hours of work?” he said.
The USDA office is in the Watumull Plaza in Lihu‘e, 4334 Rice St., suite 203. Call Ishikawa at 245-9014 ext. 104 for more information.
• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@kauaipubco.com.
