Farmers Donate During Holiday Season

During the holidays, we’re reminded that it’s better to give than to receive – a principle that is recognized by thousands of farmers nationwide.

Opportunities abound for farmers to donate portions of their harvest to food-donation programs throughout the year, but are especially welcome during times of economic difficulty. It’s also important in November, December and January when people celebrate major holidays with food, food and more food.

Tax incentives can sway farmers to be more generous with their harvest. The Good Samaritan Hunger Relief Tax Incentive Extension Act of 1996 states that only farmers and ranchers using the accrual method of accounting may benefit from incentives for charitable donations of food.

In June, Sen. Dick Lugar, R-Ind. reintroduced the act to Congress with a proposal that would allow farmers to receive tax deductions on the full market value for produce that cannot or will not be sold.

“It has been my experience that farmers generally make the donation of food out of their desire to support their communities and the less fortunate, and any enhanced deduction was not the primary motivation of such a contribution," Lugar said. "The legislation does make it easier for farmers to take such an enhanced deduction and will result in increased donations of food should the bill pass."

Many national and state food-donation programs exist throughout the country to help distribute food to needy Americans.

The Farm Bureau Young Farmers & Ranchers Program, in conjunction with Feeding America, the nation's largest hunger-relief charity, created the “Harvest for All” campaign in 2003. This nationally recognized campaign includes activities organized by state and county Farm Bureaus in connection with local Feeding America affiliates across the country. Since its inception, it has provided more than 16 million pounds of food.

U.S. Rep. Tim Bishop, D-N.Y. is another proponent of extending and increasing the scope of the original act.

“During these difficult economic times, this tax incentive would be a win-win for our farmers and for those who are struggling to find food to eat,” said Bishop. “Rather than letting excess produce go to waste, farmers can support local charities.”

For example, the 2009 harvest is one of the largest in history for corn and soybeans. As another outlet for their crops, in addition to selling or storage, farmers can consider selling grain in the name of a church or an organization. These entities then use the proceeds to purchase food items.

Donation is a win-win for farmers and producers. Not only honorable, food donations are also economically smart for members of the agriculture industry. With so many local, regional and national opportunities to choose from, farmers would be wise to consider donations now and in the future.

What provisions should be included in the act? How can ag members create awareness about the importance of tax incentives for food donations?










Farmers and Philanthropists – Proposed tax incentives to stimulate food donations

The American Farm Bureau Federation (AFBF) is working to implement a tax code that would allow farmers to receive enhanced tax breaks for charitable donations.

The Good Samaritan Hunger Relief Tax Incentive Extension Act of 2009 was reintroduced by U.S. Sen. Dick Lugar, R-Ind., June 22 to promote charitable food contributions by American farmers and ranchers. The current bill is set to expire in December.

"Despite the wealth of our country, affordable food prices and ongoing government food assistance programs, some people still have difficulty purchasing food for a proper diet," said AFBF President Bob Stallman in a letter to Congress.

America’s recession is further encouraging the bill’s passage, as the nation’s food banks report a 30-percent increase in need.

Only farmers and ranchers who use the accrual method of accounting may benefit from incentives for charitable donations of food. Bill supporters believe that an amended tax system with increased deductions could incite farmers to offer more of their surplus product to Americans in need. According to the California Farm Bureau Federation, the bill proposal increases the valuation to full market value of the donation and makes this provision a permanent part of the Internal Revenue Code.

"It has been my experience that farmers generally make the donation of food out of their desire to support their communities and the less fortunate, and any enhanced deduction was not the primary motivation of such a contribution," said Jim Bates, Fowler Packing Co. chief of financial operations and committee chair of Community Food Bank in Fresno, California. "The legislation does make it easier for farmers to take such an enhanced deduction and will result in increased donations of food should the bill pass."

Stallman concurs with Bates’ sentiment and notes the established benevolence of America’s farming community but believes more opportunity exists, “Many more would donate if they were able to bear the costs of harvesting, processing and transportation.”

The bill currently resides with the Committee on Finance.

Farm Share, a nonprofit organization based in Florida, recovers food that has been rejected in the retail sector because of minor imperfections and delivers excess food to social-service agencies throughout the eastern U.S. The organization asserts that its efforts “saves the farmers the added expense of disposal fees and related labor costs. In addition, field productivity is increased, sales are potentially increased as a result of product exposure, and food is donated and distributed to needy people without interfering with normal marketing channels.”

Feeding America, a nationwide network of member food banks, is America’s leading domestic hunger-relief charity. The organization provides tax breaks to corporate partners and details how entities can become involved. AFBF is an industry advocate of this aid organization.

To learn more and to voice your opinion about the bill, visit http://www.opencongress.org/bill/111-s1313/actions_votes.

Would farmers respond to further tax breaks or is more motivation necessary? Should Congress consider similar legislation for other industry groups such as meatpacking companies and food processors and distributors? Should the federal government provide additional support to organizations such as Farm Share and Feeding America?