Home > News & Commentary > Food Law & Policy > Food Security: Businesses learn there are tax incentives and laws to help them recycle mountains of food

Food Security: Businesses learn there are tax incentives and laws to help them recycle mountains of food

Written by: Niina Heikkinen, E&E reporter
Published: Wednesday, July 22, 2015
Read the article on ClimateWire

Each year, Americans waste 30 to 40 percent of all the food that is grown, harvested and bought. In 2010 alone, the Department of Agriculture’s Office of the Chief Economist estimated that the amount of food loss and waste at the retail and consumer level was about 122 billion pounds, worth about $161 billion.

At the same time, close to 50 million Americans (14.3 percent of all households) do not have sufficient access to food because they don’t have the resources to obtain it. Of those individuals, 12.2 million people are eating less than what they need to maintain a nutritious diet, according to data from the USDA’s Economic Research Service.

While the two problems are daunting separately, three New England states may have found an avenue to address both waste and hunger at once. Their solution — regulate the amount of food that businesses can throw away, and encourage them to donate the portion that is still wholesome to charity.

It’s an approach that U.S. EPA Administrator Gina McCarthy supports.

“Wholesome, useable food could be donated to the millions of food insecure Americans who live in our communities, rather than sent to landfills,” she said in a statement. “Reducing wasted food is good for the economy, good for the environment, and helps fight climate change. And it’s a great reminder that solutions to environmental challenges can double as solutions to social challenges.”

Despite these benefits, fears of lawsuits over spoiled food, coupled with a lack of financial incentives to cover additional labor costs for preparing donations, mean getting more businesses, universities and other institutions to donate their extra food is no small task.

Last October, Massachusetts joined Vermont and Connecticut as the third state to restrict the amount of commercial food waste it sends to landfills (ClimateWire, July 21). Under the new Massachusetts Department of Environmental Protection (MassDEP) regulation, businesses and institutions that produce a ton or more of food waste in a given week will have to keep that food out of the trash.

The regulation applies to most major supermarkets, colleges and universities, as well as to larger hospitals. Even seasonal businesses may have to comply, according to Lorenzo Macaluso, director of green business services at the Center for EcoTechnology, which is employed by the state to implement the regulation.

According to MassDEP, 15 to 19 percent of the state’s waste is unused food, depending on the season.

Most of the food that is being diverted is destined to become compost, but groups within the state are working to ensure that more of it goes to Massachusetts residents in need.

For-profit business becomes ‘matchmaker’

Sasha Purpura, the executive director of the food rescue program Food for Free, is leading one of those groups. Her program collects fresh food from donors, including wholesale distributors, universities, farms and bakeries, and delivers it to more than 100 food programs in Boston and the greater metropolitan area.

Since March, she said she’s seen an increase in the amount of prepared foods Food for Free receives, which she attributes to businesses complying with the new regulations on food waste.

“Personally, I think we have a window right now because so many organizations are trying to figure out what to do. If they all turn to compost, it will be a lot harder to get them to change,” she said.

Preserving food for donation requires more training and coordination with outside agencies, which can discourage businesses and institutions from participating, she said.

That’s where Steve Dietz comes in. Dietz is the business development director at the for-profit company Food Donation Connection. His job is to convince restaurants and other food service organizations that it is in their best interest to donate their excess food and to help them find the easiest way to do that in their area.

The staff at the Food Donation Connection helps businesses develop a food donation program and connects them with qualified nonprofit agencies, and it will continue to provide support once the program is up and running. That includes helping to create documentation to track donations, providing daily support through a hotline and reporting donations to corporate offices. Since it began in 1992, the company has expanded to work with 18,000 locations, donating food to 9,000 recipient agencies. The Food Donation Connection works in all 50 states and has clients in Canada, the United Kingdom and Ireland.

“We’re kind of like matchmakers, we don’t pick up the food or touch it, we just manage the connection,” Dietz said.

Before any of that work can begin, Dietz has to overcome a few common roadblocks to get businesses onboard.

“Initially, people will say they don’t have any food waste,” he said, adding that he always calls out business that try to make that claim. “Once we get through that BS, they’ll say, ‘OK, so we’ve got some surplus.'”

Often business leaders are reluctant to talk about waste because they do not want their board of directors to realize just how much food they are throwing out. Many businesses and institutions are also afraid of lawsuits from recipients who may become sick from the food, according to Dietz.

In fact, 67 percent of wholesalers and retailers in the United States listed liability concerns as one of the barriers to donating food, according to a 2013 survey by the Food Waste Reduction Alliance, which is led by the Grocery Manufacturers Association, Food Marketing Institute and National Restaurant Association. Transportation constraints and insufficient cold storage and refrigeration were other main concerns.

Dispelling fears of liability

Yet fears of liability are generally unfounded, thanks to a largely unfamiliar law, advocates say.

Under the 1996 Bill Emerson Good Samaritan Food Donation Act, a person or gleaner (someone who picks leftover unharvested food from farms) can’t be held criminally or civilly liable for donating a food or product as long as that person donated it to a nonprofit organization in good faith. The law also protects nonprofits from liability for providing food they believe is wholesome. The only instances where businesses or nonprofits could be at risk legally is if an individual is harmed or dies from a food product due to “gross negligence or intentional misconduct.” State and local laws also take precedence, which has caused problems for Dietz in the past.

Last year, Boston’s health officials stopped an estimated 200,000 pounds of Whole Foods hot bar food from being donated because of concerns about the lack of ingredient labeling, according to Dietz. He added that such situations are unusual.

“Most of the time, health departments are very supportive; they have hearts, too,” Dietz said.

What qualifies as wholesome remains a sticking point for some restaurant and grocery owners who aren’t sure what level of effort they need to make to determine food is safe, said Laurie Beyranevand, the associate director of the Center for Agriculture and Food Systems at Vermont Law School. Beyranevand is studying the barriers to food donation and is specifically looking at why more farmers don’t allow gleaning on their fields after harvest.

“There is a question about whether they have to make an evaluation about whether the food is safe for consumption,” she said. “Is this just an eye check to see if there are worms or maggots, or is it something more than that?”

Then there is the issue of date labeling. Altogether, 41 states have regulations requiring that perishable foods have “sell by” or “use by” date labels, said Emily Broad Leib, the director of the Food Law and Policy Clinic at Harvard Law School. Consumers, businesses and state regulators often treat food close to or at those dates as spoiled, which she said was a mistake.

“You shouldn’t fear the date, it’s not a question of safety,” she said, adding that the concerns about the wholesomeness of food can make donating food at or near its expiration date more difficult, particularly in Massachusetts.

Even if donating food is legal, the added labor and material costs associated with preserving donations often make it a less attractive option than sending leftover food to a composting facility. To overcome this, Dietz works with businesses to help them apply for tax exemptions that can boost their bottom line.

Currently, businesses in the best position to get tax credits from food donations are C corporations. Under the 1976 Tax Reform Act, C corporations can receive a permanent enhanced tax deduction for donating food to either a public charity or private foundation. According to Dietz, his clients can recoup up to 60 percent of their losses, which can offset the added cost of preserving food for donation.

Meanwhile, smaller businesses like restaurants and farms have not had permanent tax incentives. This has discouraged some from participating in donation programs, he said.

In Massachusetts, state officials are still working to make sure that all obligated parties are complying with the food waste ban, and although many of the big generators are diverting their leftover food, lots still aren’t, Macaluso said.

As for whether that food will be donated, it may be too early to tell.

“Feeding hungry people is certainly a much higher beneficial use for food from supermarkets, colleges and universities,” Macaluso said. “We are looking at the best way to do this. I think some places see it as too much of a barrier.”

Copyright 2015 E&E Publishing, LLC. This article was reprinted from ClimateWire with permission of E&E Publishing.

Pin It on Pinterest