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Agricultural Review

Farmers can gain tax benefits by donating food

Farmers who donated fresh produce to hunger-relief agencies are reminded that they can take a charitable tax deduction on their 2006 federal tax return. The benefit, provided for in the Pension Protection Act of 2006, allows farmers to deduct food that was donated between January and December 2006.

The allowed deduction is equal to the base cost of producing the food plus half the fair market value appreciation, not to exceed half the cost. For example, if it cost $100 to produce a container of potatoes and the grower would normally sell the container for $200, the tax deduction for donating the container of food is $150. The federal benefit remains in effect through December 2007. North Carolina has allowed a tax credit for donated food since 1983.

"This is a win-win for everyone involved, and I hope farmers who haven't participated in gleaning efforts before will be encouraged to participate this year," Agriculture Commissioner Steve Troxler said. "Not only is it the right thing to do, you can save money on your taxes, too."

Farmers can develop relationships directly with their local hunger-relief agencies, but those who do not want to collect and transport produce to a local food bank themselves can contact the Society of St. Andrew North Carolina to help with the work. SoSA has a network of volunteers and drivers who help move food from the fields and warehouses to partner agencies, and will provide a receipt for tax preparation.

In 2006, SoSA worked with 600 individual farmers, up from 417 in 2002. In the same five-year period, partner agencies increased from 1,542 to 2,266, indicating there is a greater need for food assistance in the state.

"We glean surplus produce in any volume. From the car load to the tractor-trailer load, Society of St. Andrew gleans whatever is edible," said Julia Webb Bowden, director of SoSA-NC in Durham. "We will go into the fields and pick out everything left behind and then put it in 10-pound bags, or we can move bulk or packaged produce that has been in the warehouse.

"Too big, too small, too ugly, while it doesn't sell well in a grocery store, fills a hungry belly just as well as perfectly uniform produce," she added.

The N.C. Department of Agriculture and Consumer Services works with Second Harvest Food Banks and SoSA to transport produce. "We try to move as much produce as we can for SoSA, using federal funding from The Emergency Food Assistance Program," said Gary Gay, director of the NCDA&CS Food Distribution Division. "In the 2005-2006 fiscal year, the Food Distribution Division helped SoSA distribute more than 3.3 million pounds of produce."

Farmers, restaurants and other businesses with leftover food can contact the Society of St. Andrew toll-free at (866) 453-2662 or call the Food Distribution Division's Food Donation Hotline, (888) 498-3449, to find a local hunger-relief agency.

Farmers are encouraged to talk to their tax adviser about the benefits of donating produce. Farmers are protected from liability through the Emerson Good Samaritan Food Donation Act.

NCDA&CS Public Affairs Division, Andrea Ashby, Director
Mailing Address:1001 Mail Service Center, Raleigh NC 27699-1001
Physical Address: 2 West Edenton Street, Raleigh NC 27601
Phone: (919) 707-3001; FAX: (919) 733-5047

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