Area farmers want state tax credits restored
Agriculture Farmers frustrated with what they view as a double standard in the states tax-credit system on giving to local food banks
By Carol McAlice Currier, Statesman Journal reporter, for the Northwest News Exchange
Farmers are scratching their heads.
In testimony in mid-January in front of lawmakers gearing up for the next legislative session in February, men and women who work the land described their frustration with what they see as a double standard in the states tax-credit system.
They were gracious in their presentations, but they were also eager to correct what they consider an inequity.
Ordinary residents, for instance, said Ian Tolleson, governmental affairs associate for the Oregon Farm Bureau, can donate clothes or furniture to Goodwill and get a receipt and tax deduction for their contributions.
But farmers in Oregon who grow an extra acre or two and create thousands of pounds of green beans or corn, harvest it and then donate it to food banks to help feed the states hungry get zero tax deductions for their generous gifts, he said.
The lack of a charitable tax credit for area farmers brought the Oregon Food Bank and the Oregon Farm Bureau to two committee meetings Thursday, the second of three legislative days at the Capitol. They asked lawmakers to churn Legislative Concept 69 into a bill this year and reinstate a tax credit that ended in 2011 for fresh food donations.
Its not that most of us wouldnt do it (donate fresh produce) anyway because its the right thing to do, said John Zielinski, whose family owns the E.Z. Orchards farm in Salem and donates tens of thousands of pounds of fresh produce to Marion-Polk Food Share and the Silverton Area Community Aid annually. But it would be nice if there was some incentive from the state.
The first report was given to the House Interim Committee on Rural Communities, led by Rep. Brian Clem (D-Salem). The food bank reminded lawmakers about last years increased demand for emergency food baskets in the state.
Citing a recent federal Food & Drug Administration Food Insecurity Report, Mike Moran, a spokesman for the Oregon Food Bank, said 509,000 households in Oregon lack access to adequate nutrition, and more than 217,000 Oregonians skip meals daily or go days without eating.
The food bank has traditionally relied on the food industry for about 60 percent of its donations, Moran said, but technological improvements are forcing the food bank to look for other sources of food.
Technology is working against us. The reality is processors are making fewer mistakes with technology; they have fewer dings and dents in cans, and mislabeling, which was product they previously donated, Moran said. So were seeing fewer donations from that part of the supply chain. Growers of fresh produce are an under-tapped resource for us, and we need to help them.
But crop donations cost farmers, he said. They spend money for the labor to harvest the produce, on the utilities to clean, process and store the crop, on materials such as tubs and tractors, and on fuel.
The problem is the tax credit, first started in 1977 and sunsetted in 2011, was only 10 percent, which was too low. LC-69 would reinstate the tax credit, and take it from 10 percent to 15 percent, Moran said.
Moran said its difficult to estimate the official revenue impact of the measure. In 2011, before the last crop tax credit expired, it cost the state between $60,000 and $150,000. If raised to 15 percent and implemented this year, some estimates put the cost to the state at between $380,000 and $400,000.
Which is why some attending the committee meetings gently suggested the crop tax credit could even be raised to 25 percent.
Ten percent isnt going to be a real credit, said Katy Coba, director of the state Department of Agriculture. Fifteen percent is probably low, too.
But 15 percent is better than 0, Moran assured the lawmakers, who laughed and agreed.
Sarah Hucka, who owns the Circle H Farm in Dexter, said she sells her organic fruits and vegetables directly to farmers markets and CSAs, which are community-supported agriculture members who pre-pay for their weekly boxes of fresh fruit and vegetables.
About 40 percent of what she grows isnt polished enough to sell directly to her consumers, but there is nothing wrong with the organic produce. All of her crops are hand harvested, and some of it might be slightly bruised, but nutritious and edible nonetheless.
I already donate, but I would donate more if there was a tax credit, Hucka said. It would be a nice advantage to help recoup some of my costs.