With the news reporting on record-high temperatures, labour shortages, and a growing population to feed, R&D in agriculture offers an opportunity to flourish. A successful R&D claim can provide the financial boost needed to drive the agriculture industry toward improved solutions, processes, and products, ultimately overcoming the industrial challenges. This article will provide comprehensive information on the significance of R&D in addressing challenges faced by the agriculture industry and the advantages industry experts can expect to receive when applying for R&D tax credits.

1. Understanding the role of R&D in the agriculture
industry
With the news reporting on record-high temperatures, labour shortages, and a growing
population to feed, R&D in agriculture offers an opportunity to flourish. A successful R&D
claim can provide the financial boost needed to drive the agriculture industry toward
improved solutions, processes, and products, ultimately overcoming the industrial
challenges. This article will provide comprehensive information on the significance of R&D in
addressing challenges faced by the agriculture industry and the advantages industry experts
can expect to receive when applying for R&D tax credits.
The challenges faced within the agricultural industry
R&D tax credit opportunities lie within tackling key industry challenges. The government is
actively encouraging and supporting UK businesses that are involved in scientific and/or
technological innovation by reducing corporation tax bills or providing a payable tax credit. In
the context of agriculture, here are some examples of agricultural industry challenges that
require out-of-the-box thinking and an investment of time and expenditure to resolve through
R&D activities:
Climate change
Climate change is impacting the agricultural sector in a number of ways. Firstly, the UK has a
Net Zero target; a legally binding commitment to reduce the UK’s greenhouse gas emissions
to a level where the country no longer contributes to global warming, by the year 2050.
Certain agricultural operations cause a detriment to the environment. For example, a 2021
government report states there is a 28% failure rate for meeting standards of the Water
Framework Directive; an EU legislative set of standards that detail best practices to prevent
water pollution. Water pollution is caused by the drainage of fertilisers, pesticides, slurry, and
soil erosion from agricultural land.
Another way climate change is challenging farmers’ work is the disruption of crop production
and reduced yields due to more frequent and severe weather events, such as droughts and
floods. How do the practices of farmers adapt to rising temperatures to maintain food quality
and safety?
According to the Agri-climate report 2022, 58% of farmers were taking action to reduce
emissions. These actions typically involve innovative thinking; challenging the “normal” way

2. to find a new solution, even if it seems initially uncertain. Lots of these actions would most
likely be eligible for R&D tax credits.
A growing population
With increased demand, there is greater emphasis on land, water, and other natural
resources, which can lead to overuse and degradation. The United Nations states: “The
global human population reached 8.0 billion in mid-November 2022 from an estimated 2.5
billion people in 1950, adding 1 billion people since 2010 and 2 billion since 1998. The
world’s population is expected to increase by nearly 2 billion persons in the next 30 years”.
Currently, the agriculture industry provides half of the food we eat and employs just under
half a million people. With a growing population, farming needs to be resilient to keep up with
this rate of growth. R&D would be looking at how to increase the efficiency of farming
practices to prevent wastage and maximise output.
Labour shortages
Difficulty in finding and retaining skilled labour in agriculture is a common issue, especially in
rural areas. Increasing labour shortages mean the agriculture industry will struggle to meet
targets. Many agricultural tasks are highly seasonal, such as planting and harvest seasons.
Labour shortages can lead to delays, reduced crop yields, and economic losses if there
aren't enough workers during these critical periods. The COVID-19 pandemic impacted
labour shortages, as well as markets, distribution networks, and pricing. The agricultural
labour force is ageing, and younger generations are less inclined to pursue careers in
farming. This demographic shift exacerbates labour shortages as experienced farmers retire
without sufficient replacements. Research and development is needed to use technology to
mitigate these shortages.
Damage to biodiversity
The agriculture industry contributes to damage to biodiversity through several mechanisms
including habitat conversions where natural habitats are cleared to make room for agricultural
purposes, and the use of pesticides, herbicides, and fertilisers can harm non-target species
and disrupt ecological balances, affecting both flora and fauna.
Damaging biodiversity poses a significant challenge to the agriculture industry as it disrupts
the delicate ecological balance essential for crop pollination, pest control, and soil health.
Reduced biodiversity can lead to the proliferation of pests and diseases, requiring increased
pesticide use and additional management efforts. Furthermore, the decline in pollinator
populations, like bees, threatens the fertilisation of many crops, potentially resulting in
reduced yields and economic losses. Loss of biodiversity can also lead to soil degradation

3. and reduced fertility, as diverse ecosystems contribute to nutrient cycling and soil health.
Ultimately, the agriculture industry heavily depends on the services provided by a diverse
array of species, making the conservation of biodiversity essential for sustainable and
productive farming practices.
R&D tax credits for the agriculture industry are rewarded to businesses exploring how to
protect biodiversity. This is a core component of organic farming which only 3% of the
agriculture industry is involved in.
Fluctuating prices
Due to the invasion of Ukraine, food prices went up, contributing to the cost of living crisis.
There was an increased labour shortage because Ukrainians comprised 67% of the
temporary workers granted Seasonal Worker visas. Due to the imposition of martial law in
Ukraine, prompted by the Russian invasion, has restricted Ukrainian men aged 18 to 60 from
leaving the country, and are unable to assist in the UK’s agriculture industry. According to
data from the UK Government, individuals from Ukraine and Russia accounted for 43% and
5%, respectively, of the 6,618 individuals who arrived in the UK through the Seasonal Worker
scheme from January 1, 2022, to March 31, 2022.
The conflict led to a 50% surge in the value of wheat, with a 35% elevation in the per-unit
cost, primarily driven by the disruption in the global cereals market stemming from the global
trade disturbances caused by the Ukrainian war.
How is R&D in agriculture changing industry practices?
It’s clear that there are challenges within the agriculture industry. This means there is a large
scope of R&D opportunities. The UK government encourages farmers and others involved in
the agricultural industry to overcome these challenges with technical or scientific discovery.
Let’s go through some examples of eligible agriculture projects:
Involvement of AgriTech in agricultural operations
Agritech, or agricultural technology, is a sector that leverages innovative digital and
technological solutions to enhance and streamline various aspects of farming and agricultural
practices. In simple terms, it is the use of technology in agriculture. It encompasses the use
of data analytics, automation, and advanced tools to improve crop production, livestock
management, resource efficiency, and overall sustainability in the agriculture industry.

4. Examples of AgriTech include:
● Precision farming - The AgriTech strategy enables farmers to use data and
technology for precise planting, irrigation, and fertilisation, optimising resource use
and increasing crop yields.
● Livestock monitoring - AgriTech includes wearable sensors and tracking systems for
livestock that help monitor the health and behaviour of animals, improving their
well-being and productivity.
● Smart irrigation - AgriTech incorporates automated irrigation systems that adjust
water usage based on weather conditions and soil moisture, reducing water waste,
and conserving resources in agriculture.
Crop improvement
Developing new crop varieties through selective breeding, genetic modification, or other
innovative techniques to enhance traits like yield, disease resistance, or drought tolerance.
Pest and disease management
Researching and testing novel methods for controlling pests and diseases, including the
development of natural pesticides, integrated pest management systems, or
disease-resistant crop varieties.
Soil health and management
Investigating methods to improve soil fertility, reduce erosion, and enhance nutrient cycling
through practices like cover cropping, conservation tillage, and organic matter management.
Livestock health and genetics
Researching and breeding programs to improve the health, productivity, and genetics of
livestock, including disease resistance and feed efficiency.
Sustainable farming practices
Studying and adopting sustainable practices that reduce environmental impacts, such as
agroforestry, organic farming, and regenerative agriculture.
Water management
Innovations in water-saving techniques, like smart irrigation systems and rainwater
harvesting, improve water use efficiency in agriculture.

5. These are just a number of examples of eligible R&D in agriculture. There is so much scope
and variety to what counts as R&D which is why we always recommend speaking to an R&D
tax credit specialist to check your eligibility and ensure you don’t miss out!
Key takeaways
The existence of industry challenges reveals the mass of opportunities for R&D in the
agriculture industry. British farming is a hotspot of investment opportunities. This financial
boost is transformative and should not be slept on! Advancement is crucial in agriculture and
the government’s tax incentive provides rewards to UK businesses who dare to question the
normal way of doing agricultural practices, for greater benefits across the industry.
How to receive R&D tax credits for agriculture?
It’s incredible to watch the agriculture industry evolve to meet sustainable goals and feed
more mouths. As R&D tax credit specialists, our primary passion is innovation. We inject this
passion into each R&D claim that has resulted in over 2400 positive phone calls announcing
the R&D tax credits on their way to our clients. We understand the natural problems that can
arise while claiming and what makes HMRC enquire about your claim, delaying the process
which is why our stringent ad hoc compliance processes proactively avoid these problems. If
you’re not 100% sure whether you’re eligible for R&D tax credits in the agricultural industry,
you can book a free consultation to discuss your eligibility.