Why R&D in Agriculture Is So Important
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Farming is changing. The future of agriculture is centred on a new era of agri-tech, where advances in technology yield new growth in the sector to meet increasing demand and enable the UK to meet net zero targets. In this blog, we delve into the current state of the sector, the challenges within agriculture, and the role innovation plays in overcoming these challenges in 2023. There is a string of challenges for the agricultural sector. The fact is the world’s population is growing at a much faster rate than the supply chain for food production. Arable land needs significant restoration before it can sustain crops at scale. Environmental pressures such as climate change, which creates warmer temperatures and drier soils, are affecting farming practices. And, the National Farmers’ Union has not been shy when it comes to expressing its concern about rising costs, labour shortages, bird flu, adverse weather affecting output, and post-Brexit changes. Agriculture and Climate ChangeThe impact of climate change on agriculture is drastic – reducing crop yields and lowering livestock productivity. However, the agricultural industry is not the innocent party, as farming practices contribute to climate change by way of greenhouse gases released into the atmosphere. The situation is that, despite greenhouse gas emissions from agriculture decreasing by 16% between 1990 and 2020, the sector still contributes 11% of all greenhouse gas emissions in the UK. There is good news, though, as according to the Agri-climate report 2022, 58% of farmers were taking actions to reduce emissions. Innovation within agriculture and food production can help minimise this and contribute to net zero goals. Earlier this month at the Agriculture Innovation Mission for Climate Summit, the UK pledged to be a global leader in food productivity, sustainable farming and tackling climate change. As well as investing £3 million into developing more sustainable fertilisers, hundreds of millions of pounds will be ploughed into ongoing support and grants for UK farmers to foster innovation within the sector. Agriculture Innovation – What Is Agri-Tech?The introduction of technology within agriculture enables the sector to tackle its problems head on in all aspects of farming, food production and distribution, in turn increasing productivity and becoming more sustainable. Rather than developing more land for agricultural use, the agriculture sector is encouraged to use technology as a solution and embrace innovation and agricultural R&D. A report released by the World Government Summit in 2018, Agriculture 4.0 – The Future of Farming Technology, stated that demand is increasingly growing, leading to a need to produce 70% more food by 2050. The use of tech in agriculture will be the catalyst for change and improvement. Some exciting examples of agri-tech in 2023 include a hands-free solution to monitor a cow’s welfare and performance, and a working herd of harvesting agri-robots. Other examples of technology in agriculture include:
Agri-tech allows farms to be more profitable, efficient and environmentally friendly. Where Is R&D Found in Agriculture?In 2021, the UK agriculture industry was made up of 216,000 farm holdings. Innovation is frequent on farms – from adapting products to keep up with changes in climate to developing new techniques to extend the growing season. Here are some examples of R&D in agriculture:
If a farmer has addressed a scientific or technological uncertainty whilst innovating and made an advance in the industry – even if the project was unsuccessful – they could be able to take advantage of HMRC’s R&D tax credit incentives. R&D Tax Relief for AgricultureFor the tax year 2020/2021, HMRC’s R&D tax relief statistics revealed that the agriculture, forestry and fishing sector received £70 million of R&D tax relief, but only 1.3% of businesses in the sector (1,275 businesses) made an R&D claim. The average agricultural R&D tax relief claim was worth £55,000. Making an Agricultural R&D Tax Relief Claim We understand it can be daunting considering an R&D tax relief agricultural claim, because of uncertainties of eligibility, and a lack of time and understanding, especially in these challenging times. Ryan’s team of specialists can go through your projects, identify R&D and innovation and create a robust report for HMRC on your behalf. There are so many qualifying activities for R&D, but we have the expert knowledge and experience to identify these for you and create a comprehensive, well-written claim. From process innovations to product innovations, the R&D opportunities in the agricultural sector are diverse. If your agricultural business is linking with a tech start-up to undertake R&D for the future of agri-tech, for example, you could be eligible for R&D tax relief. R&D in Agriculture: Success StoriesThe client case studies below highlight some real-life examples of R&D in agriculture and the benefits of claiming agricultural R&D tax relief. Case Study: R&D in Potato FarmingThe Client The R&D The business undertook two projects, the first focusing on their storage facilities, resulting in a 12-month programme of development managed internally with support from external subcontractors. They required a facility that could hold a large quantity of produce for extended periods while maintaining optimum quality. To ensure this, they retrofitted a bespoke facility incorporating a drywall, ventilation system and a new software system to control and monitor the conditions. This resulted in absolute control of the temperature, humidity and carbon monoxide levels within their facility, all running on lower power levels than previously used. Their second project focused on their potato stock, trialling new varieties in varying conditions to see if it was a viable investment. This project included renting acreage to test a range of soils and conditions, alongside intensive testing and monitoring of the conditions and quality checking the resulting crops. The Result Case Study: R&D in Agriculture Machinery and SystemsThe Client The R&D Projects to affect this include the design of more efficient systems for the drying of products, blending processes and systems for cleaning and chopping produce. To find these solutions, they invested in research with external partners to find ways to adapt and modify existing machinery and create better processes. The impact of these developments for their clients means a much more cost-effective and green way of working. The Result This client has received over £118,000 in R&D tax relief so far for its agricultural innovation. Case Study: R&D in Crop ManagementThe Client The R&D
At the outset, there existed a significant degree of scientific uncertainty that the business attempted to overcome. Case Study: R&D in the Raising of Ruminant CattleThe Client The R&D At the outset, there existed a significant degree of scientific uncertainty, which the business attempted to overcome. Existing methodologies were expensive and reactive in form, but our client developed a technology not comparable to anything existing in the marketplace. The Result Case Study: R&D in Arable FarmingThe Client The R&D Some of the qualifying R&D projects included the business:
The Result |