Differential grain transportation rates between the Northeast and South have been identified as a possible source of comparative disadvantage for Northeastern broiler producers. Low cost barge transportation into the South provides competition for railroads resulting in generally low transportation rates in the South. Barge transportation is low cost in part because the Federal improvements of waterways have resulted in a toll-free waterway system. Solutions for a transportation model were found with and without the subsidy. The results indicate that subsidy removal is unlikely to affect interregional broiler production and consumption.