NY Farm to Food Bank Tax Credit Aims to Help Those in Need

Over the past several years, New York State has emerged as a national leader on the problem of food waste.

Just two weeks ago, Governor Cuomo and the New York State Legislature, as part of the annual budget process, reached agreement on a first-of-its-kind food waste bill that will significantly move New York forward on preventing food waste, rescuing surplus wholesome food for those in need, and recycling any remaining food scraps. I provide detail on that law here.

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In 2017, New York State leaders also enacted an innovative food waste law—a precursor to this broader bill this year—that provides a tax credit to farmers across New York State who donated fresh produce or farm products to people in need.

This tax credit law is now in effect in New York State—available for the first time for farmers in their 2018 returns.

In short, the bill allows New York farmers to claim up to $5,000 annually through a refundable tax credit equal to 25% of the wholesale value of their donations to emergency food programs. This credit will help cover the steep costs associated with harvesting, processing, and transporting crops, making donations a viable option for New York farmers—and getting more fresh food to hungry New Yorkers.

To help farmers fully take advantage of this tax credit, and to help spread the word to other states about this powerful credit, NRDC is releasing two new resources.

First, we are releasing a Farmer’s Guide on the tax credit that explains in simple language what this tax credit is and who can apply for it through New York State returns. 

Second, we are releasing a case study entitled: Addressing Food Waste and Increasing Food Donation Through the Farm to Food Bank Tax Credit. This report explains the legal landscape around food donation, shares some lessons learned from our campaign in New York, and highlights a few considerations for other states considering this kind of tax credit. Indeed, the goal of this case study is primarily to provide a roadmap for other jurisdictions to follow suit.

Why is this tax credit so critical?

Each year, millions of pounds of fresh fruits and vegetables go unharvested here in New York. Much of this produce is perfectly good but cannot be marketed at retail value due to aesthetic imperfections or other market considerations. At the same time, 2.4 million New Yorkers struggle to have consistent access to healthy food. 

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To address this problem, NRDC worked with a broad and impressive coalition of nearly 150 agriculture and anti-hunger groups—including Farm Bureau, Hunger Action Network of New York State, National Young Farmers Coalition, and City Harvest—to pass this tax credit.

The New York Farm Bureau reports that in 2018, NY farmers donated an additional 1.6 million pounds of fresh produce than in 2017—translating to about 9 million additional meals for our fellow New Yorkers in need.

But the challenges of food insecurity and food waste are not unique to New York. In too many states across the country, farmers leave fresh and healthy food in the fields because it is too expensive to harvest and pack that food for donation.

That is why we decided to prepare both the New York State specific tax guide as well as the longer case study for advocates and policy makers in other states.

Together, we hope these two new resources will help further increase donation of healthy farm fresh food across the state and encourage and support advocates in other efforts who are considering similar policies.

About the Authors

Margaret Brown

Senior Attorney, NY Regional, Healthy People & Thriving Communities Program

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