TRENTON – To create greater access to healthy foods and reduce food waste, the Senate passed legislation today sponsored by Senate Majority Leader M. Teresa Ruiz and Senator Nilsa Cruz-Perez that incentivizes farmers to donate fresh produce.
“As grocery costs continue to rise, more families are struggling to put food on the table. The recent cuts to federal programs that connected local farmers with food banks, which included $26 million in support for New Jersey farmers, will only deepen this crisis,” said Majority Leader Ruiz (D-Essex/Hudson). “This pilot incentives program allows us to take matters into our own hands by encouraging farmers to donate surplus fruits and vegetables to local charitable organizations. In doing so, we can help food pantries meet growing demand, expand access to healthy foods, and further strengthen the connections between farmers, food pantries, and the communities they serve.”
The bill, S-2200, establishes a pilot program for three years in the Department of Agriculture in consultation with the Department of Treasury that provides a tax credit against the corporate business tax and the gross income tax for the value of fruits and vegetables donated to any charitable organization by commercial farm operators.
The need for such a program has become more critical, as the U.S. Department of Agriculture recently eliminated the Local Food for Schools Cooperative Agreement Program and the Local Food Purchase Assistance Cooperative Program. This included $26 million in previously committed funding that would have supported producers across New Jersey in providing fresh produce to schools and food banks. Before the program was terminated, it reached 30 direct suppliers and over 80 farms via food cooperatives.
According to the Community FoodBank of New Jersey, 75 percent of people they serve often choose inexpensive and unhealthy food options to get by.
“People struggling to make ends meet often choose unhealthy food options due to their convenience and affordability,” said Senator Cruz-Perez (D-Camden/Gloucester). “Because of this, low-income individuals face higher obesity rates and greater risks of chronic health problems. This bill aims to improve the health and wellness of people in need by providing healthy, nutritious food to charitable organizations that would otherwise go to waste.”
The tax credit would equal 50 percent of the wholesale value of the fruits or vegetables. Farms would be eligible for up to $5,000 per year in tax credits. The pilot program would be capped at $100,000 in annual tax credits.
In order to receive the tax credit, a commercial farm operator would submit to the Department of Agriculture a written statement received from a charitable organization substantiating each donation of fruits or vegetables made. Upon approval of the written statement, the Department of Agriculture shall notify the Director of the Division of Taxation as to the eligibility of the commercial farm operator for a tax credit in the amount approved by the department.
The Secretary of Agriculture, in consultation with the Director of the Division of Taxation in the Department of the Treasury, would also be required to prepare an annual report that includes information on the utilization of the credit and the produce donations.
The legislation passed in a 39-0 vote.