How Irish farmers are benefitting from R&D Tax Credits

With war in Ukraine continuing and food costs soaring, the global farming industry is under huge pressure. Add to that the threat of climate change, population growth, extreme weather and drier soils, advances in technology are essential in tackling challenges head-on.

Why is R&D important in Agri-Tech?

There’s a vast range of problems affecting farmers both in Ireland and across the world. Technology is the key to solving these problems, and nowadays includes cutting edge solutions like drone technology, vertical farming and robotics, to name just a few. The amount of research and development (R&D) required is therefore massive with plenty of opportunities for innovation.

In the Republic of Ireland, Agri-Tech provides businesses the chance to avail of Revenue’s R&D Tax Credits scheme in order to claim back money off their Corporation Tax bill. This can then be reinvested into further research and help to grow the company. Revenue’s test for genuine R&D is very broad, and simply requires companies to have addressed a specific technological or scientific uncertainty via innovation.

The Agri-Tech sector therefore offers great potential for R&D. Ground-breaking new technologies are being developed to provide solutions like how to produce greater yields for less cost and input. Indeed, there are many businesses all over the agricultural sector that are working to solve a range of global problems that could all benefit from R&D Tax Credits.

What problems may be solved by Agri-Tech

R&D expenditures can be used to help target a variety of modern issues including:

• Environmental threats and resilience, including disaster and disease
• Reducing energy use
• Feeding a growing global population
• Dealing with food harvesting, storage and waste
• Limited resources and increased pressure on natural resources

Where does R&D most occur?

Research and development can occur just about anywhere in the sector. Examples include:

• New processes and technologies in agricultural innovation - developing, adopting and exploiting new technologies and processes
• Robotics and Artificial Intelligence (AI)
• Increasing crop yields
• Resource management
• Monitoring, satellite imagery and remote sensing
• Improving labour productivity through machines and robotics
• Drones
• Biotechnology
• Vertical farms
• Soil management and smart irrigation

R&D and Agri-Tech

Although R&D in the Agri-Tech sphere is particularly varied, there are a few key areas we’ll look at briefly now.

Monitoring

Monitoring various aspects of the farming process remotely can provide data that helps to cut farmers’ costs and streamline the farming process. This can cover everything from water and soil management to the amount of fertiliser left in a tractor tank. Remote monitoring also removes the need for a person to carry out these processes manually, as well as providing data and insight into usage.

Robotics

Autonomous robots are already being used by farmers to fertilise, water and harvest a number of their crops. It’s hoped that future developments mean these robots will be able to take on a range of tasks including automated crop harvesting. Indeed, the potential to improve productivity in both Ireland and around the world is considerable.

Robot harvesters can also help to prevent crops from rotting in the fields and seriously damaging a farmer’s profits. After all, robots can work 24 hours a day when humans can’t, which could serve to drastically increase efficiency whilst saving on costly manual labour overheads.

Drones and farming

Aerial drone images are already being used to help farmers detect the presence of weeds and crop disease in the fields below. Farmers pilot the drone from the ground and can survey their fields at a rate of as much as 1000 acres an hour. The shots produced are high-resolution, and you can see the whole piece of land all in the same picture. Analysis of these detailed images can be used to design incredibly accurate spraying programmes and help farmers make better decisions around how they manage their land. This again can help boost yield, cut input costs and reduce wastage.

Scarce resources

Just like in other European countries, Irish farmers all have to compete for valuable agricultural resources including land, soil, water and sunlight. The Agri-Tech sector is vital in considering innovative new ways of dealing with such scarcity, investigating ways in which technology can create the perfect environment for growing the highest quality crops in abundance.

Smart tractors

Smart tractors use GPS signals to actually drive themselves across fields with no human operator. They’re also equipped with various sensors and cutting-edge technology, meaning they can be directed using a range of data and drone imagery. They can also be programmed to work the fields using the shortest routes, thus reducing fuel consumption and cutting down on damage to the soil and crops.

Vertical farming

A particularly up-and-coming area of Agri-Tech is vertical farming. As the name suggests, vertical farms are essentially where crops are farmed indoors in trays which are stacked in vertical racks. The method uses much less land and water to grow food, and also means less exposure to pests. As it can be set up anywhere, the crops don’t need to be transported across long distances so this method is ideal for urban environments and disused warehouse space. Many vertical farms use only a tiny amount of water compared to outdoor fields and rely mostly on cheap-to-run, energy-efficient LED lights. Perfect for producing maximum crop for minimum outlay.

Interested in claiming R&D Tax Credits?

Submitting a successful R&D Tax Credit claim to Revenue is often a complex process and mistakes can be very expensive. But with average claims hovering at around €55,000 can your company afford to miss out?

Whilst many accountancy firms have some dealings with R&D Tax Credits here at Tax Cloud (part of Myriad Associates), we specialise entirely in the R&D claims field. This means we can offer the very best, up-to-date guidance so you can be safe in the knowledge that everything is as it should be.

Our easy step-by-step process is fully supported by our team, allowing you to make a watertight claim quickly and easily. We’ll check everything at every stage too before submission, and maximise it so no cash is left on the table.

Tax Cloud is also accessible online 24/7 with nothing to download or maintain, plus you only pay our fees once your claim is successful.

For more information or further advice, feel free to call us on +353 1 566 2001 or use our contact page and we’ll get right back to you.

Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud