Farmers and food banks reaping rewards from tax credit

taxVirginia farmers and food banks alike are reaping the benefits of the Food Crops Donation Tax Credit, which makes fresh, nutritious food available to residents served by seven regional food banks.

Approved growers are entitled to a state tax credit of up to 30 percent of the fair market value of a donation, not to exceed $5,000. The maximum amount the credit allows for all qualifying taxpayers is limited to $250,000 per fiscal year.

“We anticipate that we will still be short of the $250,000 state cap this year, so there is plenty of room to grow, and many more farmers can take advantage of the tax credit,” shared Eddie Oliver, executive director of the Federation of Virginia Food Banks. “Virginia’s food banks are dedicated to getting more locally grown fruits and vegetables into the hands of Virginia families in need.”

According to Oliver, the tax credit provides a boost to farmers who may be inclined to donate anyway but cannot justify the fixed costs associated with harvesting excess produce.

“This is a wonderful program that allows farmers to donate excess crops that may go to waste in the field or at the market should they produce more than they can sell,” noted Andrew Smith, associate director of governmental relations for Virginia Farm Bureau Federation. “It also provides a great opportunity for farmers to play a role in reducing hunger in their communities.”

In response to the demand, the federation of food banks has made a concerted effort to increase the amount of fresh produce available at member food banks.

“Fresh produce is the most-requested item by our agency partners, and all seven food banks have a strategic plan for increasing the amount of fruits and vegetables they distribute through their networks,” Oliver explained. “Each regional food bank works with farmers in their service area to identify mutually beneficial packing and freight fees to help facilitate the donation to the food bank.”

The credit took effect Jan. 1, 2016, and will last through 2021. Growers interested in participating should complete a Virginia Department of Taxation Food Crop Donation Tax Credit application, form FCD-1, available at tax.virginia.gov/sites/default/files/taxforms/credits/2017/fcd-1/fcd-2-2017.pdf.