If you're doing it for financial reasons, go with Chris Weait's advice and buy pre-gouged cane. It's worth the price and hassle.
However, if you are intrigued about the whole process (from cutting the cane in the field to finishing the reed), there was a nice article in the DR about hand gouging, which explains the process very well. I don't have my issues with me now, but perhaps someone else knows of this article and can mention the issue where it was published. Apparently, while the gouging machine offers consistency, the hand gouge offers the ability to alter the gouge for each piece of cane.
I've been experimenting with alternative tools for gouging. Once I get proficient, I'll post my findings, but you can get an excellent gouge with about $150 investment. If you can visit a local woodworking store (Rockler in Dallas/Ft Worth is excellent) and take the cane with you for explanation, they may have some good suggestions for gouging the cane.
"The Ornaments look pretty, but they're pulling down the branches of the tree." - Cake