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North Carolina Tax Advantaged Policies for Crop Gleaning

Published: March 2024
Authors: Matt Peljovich, Jack Daly, Norbert Wilson

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Final report image - North Carolina Tax Advantages Policies for Crop Gleaning

Gleaning is a powerful tool to address food insecurity and waste. Gleaning is when farmers work with volunteers to rescue and donate crops left behind after the main harvest. If a farmer has crops they cannot sell, gleaning can both reduce food loss and help the less fortunate. Many farmers are motivated by the humanitarian component but are dissuaded by the logistical and coordination challenges.

Findings

  • Tax incentives have a mixed track record. Public policy is an important factor for gleaning, acting as an incentive or a barrier. In practice, there is evidence that many tax incentives are ineffective. The federal government and numerous states offer tax incentives to farmers who glean in hopes of encouraging and subsidizing the practice. Farmers argue they are not large enough to make the paperwork worth it, while others are unaware of the incentives. If policymakers are interested in designing more effective incentives, they could increase the incentive size, shift from deductions to credits, and/or reduce the administrative burden, among other ideas.
  • Ambiguity and lack of awareness weaken the potential benefits of current legal protections for farmers. Governments offer liability protections and exemptions to food safety laws. Congress has passed strong protections for farmers who glean. These protections are meant to alleviate farmers’ concerns over the risks of gleaning. Yet many of these laws have potential gaps and ambiguous language. Thus, many farmers are still wary of allowing gleaners on their fields. The federal government has taken action in recent years to update food donation laws, but there is still room for further reforms.
  • North Carolina’s tax incentive (now repealed) was the smallest offered among States, and the least financially attractive for farmers. NC implemented a tax credit in 1984 before the legislature repealed it in 2013. Comparatively few farmers took advantage of it, likely because the benefits were minor and not enough to overcome the filling burden or convince farmers who might otherwise glean. These same trends are seen in other states with tax incentives.
  • A wide range of more generous state tax-based incentives have or are being offered in several states. These incentives provide a backdrop for consideration of any new state tax credits or incentives for North Carolina.

Recommendations for policy change to support gleaning

Policymakers have options to design strong economic incentives and bolster legal protections for farmers. A lack of currently existing quantitative data on the impact of gleaning incentives does not support evidence-based policy setting. More academic research analysis is needed. Similarly, the gleaning community has an opportunity to collaborate with academics, including legal and tax experts, to inform policy interventions that promote gleaning.

Two recommendations are as follows:

  • Policy Option #1: Design an effective state tax incentive for NC farmers and gleaned crops, with special emphasis on small and medium sized farmers.
  • Policy Option #2: Adopt stronger and clearer legal protections for farmers and gleaners, and increase awareness of these policies.

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