Natural Foods Merchandiser

Food desert bill would entice new grocery stores with tax incentives

The U.S. Department of Agriculture recommends a minimum of five servings of fruits and vegetables a day and in most communities, that is doable because there are an abundance of nearby grocery stores and farmer’s markets and most people have transportation to get to them.

But convenient and abundant fresh foods are not always available for many residents in low-income areas where supermarkets can be more than two miles away. Bus routes can be few and far between and not everyone has access to a vehicle.

Legislation introduced in June by Rep. Bobby Rush, D-Ill, proposes some solutions to encourage growth of healthy food stores in depressed areas that will be treated much like enterprise zones. The Food Desert Oasis Act of 2009 would designate certain cities as food desert zones. It also would define certain business as food desert businesses and would provide tax benefits to those that derive at least 25 percent of their gross sales from the sale of fresh fruits and vegetables.

“We’re excited,” said Terry Richards, legislative counsel for Rush. “This is an opportunity to develop an economic base for employees, consumers and residents, and provide a significant opportunity to invest in healthy living.”

Richards said there is a food scarcity problem when people in certain low-income areas can’t easily obtain fresh, healthy food, but are bombarded with high-sugar, high-fat convenience food.

For businesses, the goal is to encourage them – especially “mom and pop” stores – to come into the food desert zones and open up shop, Richards said. By doing so, they would receive a rehabilitation tax credit in some cases, which would focus on redevelopment in urban centers and reducing blight. Employers would receive a tax credit of $1,500 for every employee hired from within a Food Desert Zone, and tax-exempt bonds would be used on a variety of store upgrades, from the actual purchase of a building to equipment, or even product purchases.

“Those things are a very good idea because the prevalence of obesity is highest in the poorest areas where one of the problems is the access of healthy foods,” said Kelly Brownell, director of the Rudd Center for Food Policy and Obesity at Yale University.

The cities that would be designated food desert zones are Chicago; Detroit; Cleveland and Cincinnati, Ohio; Milwaukee, Wis.; Houston and San Antonio, Texas; Memphis and Nashville, Tenn.; Birmingham, Ala.; Kansas City and St. Louis, Mo.; Indianapolis, Ind.; Baltimore, Md.; Atlanta, Ga.; Richmond, Va.; Los Angeles; Washington D.C.; Philadelphia; and New Orleans.

Under the Food Desert Oasis Pilot Program, annual reports would be submitted to Congress. The reports would include an analysis of increases or decreases in the health of the residents in the food desert zones and the impact of the investment in such areas.

The bill recently transferred to the Committee on Ways and Means. The cost of the program is currently under review by the Congressional Budget Office, Richards said.

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