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Eustace & Mukherji Bill to Provide Incentive for Farmers to Donate Surplus to Area Food Banks Clears Assembly Panel

An Assembly panel on Monday approved legislation sponsored by Assemblymen Tim Eustace and Raj Mukherji to provide commercial farm operators with corporation business tax and gross income tax credits for the value of certain donations they make to food banks.

“We’ve all heard the saying ‘Good food should never go to waste,'” said Eustace (D-Bergen/ Passaic). “With this bill, we can provide an incentive that will encourage operators of commercial farms to donate surplus crops of fruits and vegetables to local area food banks. Not only will farmers have to waste less food, but this will help to increase the amount and diversity of fresh, healthy foods available for distribution in area food banks.”

Under the bill (A-1760), commercial farm operators who make donations of fruits or vegetables fit for human consumption to a New Jersey food bank during tax periods beginning on or after January 1, 2017 but before January 1, 2022 would be allowed to claim a credit that can be used to reduce their tax liability.

The credit would be 10 percent of the wholesale value of the fruits and vegetables donated to the food bank, as determined using a quantity-weighted average of comparable wholesale sales of similar fruits or vegetables the commercial farm operator made during the month of the donations or, if no comparable sales are made, the overall average price paid for similar fruits and vegetables at the nearest regional market during the month of the donation.

“The surplus produce donated as a result of this bill would increase the amount and diversity of fresh, healthy foods available to feed hungry New Jersey residents,” said Mukherji (D-Hudson). “Instead of throwing away perfectly edible foods simply because they don’t meet cosmetic standards, farms can help those in need and receive a tax credit for it.”

“Donation of surplus food will reduce the current level of unmarketable but edible produce that goes unharvested or that is harvested but becomes waste because it fails to meet quality or appearance criteria but is still good for consumption,” continued Eustace, chair of the Assembly Environment and Solid Waste Committee.

The bill would require farmers claiming a credit to obtain a written statement from the food bank to substantiate each donation of fruits or vegetables.

In addition, the bill directs the director of the Division of Taxation in the Department of Treasury to prepare an annual report on the utilization of the credits provided by the bill. The annual report must document how the credits are used by farm operators in each year of the five-year period for which credits are allowed.

The measure was advanced by the Assembly Appropriations Committee.