Farmer Donations Benefit by Legislation

July 13, 2001

A bill approved Wednesday by a House committee would result in more food for millions of hungry and needy Americans, in part by providing farmers who donate food to charities the same tax treatment as corporate donors, according to the American Farm Bureau Federation. In a letter earlier this week to the House Ways and Means Committee, AFBF and a coalition of farm and hunger groups urged support for a provision of the Community Solutions Act of 2001 (H.R. 7).

Specifically, the letter praised a section of the bill that "corrects current inequities in the tax code" to recognize charitable food donations from farmers at a level equal to that of corporate donors. "America's farmers and ranchers have always supported hunger relief," the groups stated. "Although thousands of farmers and ranchers regularly donate products to hunger relief activities, the current tax law is a hindrance to their food donations in many ways."

The groups stated that the current tax code only provides corporations a "special deduction" for donations to food banks and excludes farmers, ranchers and other small business owners who donate. "Under current law, if a major food company donates a truckload of unprocessed apples to a food bank and a local farmer donates a truckload of apples that he just harvested to the food bank, the food company would be eligible for the (special donation) but the farmer would not," the groups pointed out. "The current tax law is not only unfair, it is an obstacle to helping us feed the hungry."

As approved by the House Ways and Means Committee, Section 103 of H.R. 7 would realign tax laws governing donated food by extending the "special rule deduction" to all business taxpayers, especially farmers and ranchers. Section 103 also would increase this deduction to the fair market value of the donation.

In addition to AFBF, groups signing the letter included America's Second Harvest, National Cattlemen's Beef Association, National Farmers Union, National Milk Producers Federation and United Fresh Fruit and Vegetable Association.