Key points at a glance
- PwC R&D Specialist, Bridget Connally provides an overview of the importance of innovation in the agriculture industry
- To manage growth and sustainability, Australia needs to enhancing productivity on existing agricultural land and adopt new operational methods
- Developing new technology such as drones and robots can reduce wastage and enhance development
- The government's Research and Development Tax Incentive is supporting new and existing agribusinesses to innovate
Commercial agriculture plays a pivotal role in the Australian economy and food security of the country. From land-based farming to aquaculture, agribusinesses in Australia are often faced with challenging conditions and concerns from a changing environmental climate. Innovation and process improvements are needed to stay ahead and face these challenges head on.
Why Australia needs innovation in agriculture
It’s not just challenges on our own shores that we need to be prepared for. Consider the expanding global population for example. According to the most recent estimate by the UN, the world could reach a population of 9.7 billion people by 2050. This, along with rising incomes in developing countries, is driving up global food demand. Demand is currently tipped to increase anywhere between 59 - 98% by 2050.
This demand will shape agribusinesses in unprecedented ways. Particularly when more farmland is unavailable or creating it comes at a high environmental cost, innovation is required to increase crop and livestock production without deforestation. Enhancing productivity on existing agricultural land and adopting new methods is the most efficient way to manage long term growth and meet global demands in a sustainable way. Given that around two thirds of Australia’s agricultural produce is exported, the world will be looking to us to supply them with higher volumes of our primary exports such as meat, wheat, dairy, and material fibres.
The Australian Government understands the importance of investing in innovative and sustainable rural industries for our nation’s interest — particularly as the mining and construction boom softens. One form of financial support for innovation in agriculture is the R&D Tax Incentive. This scheme provides a refundable tax offset for expenses relating to research and development, reducing the technical and financial risk to businesses looking to improve processes or advance technology in the field.
R&D activities in agribusinesses
Most of the R&D activities from agribusinesses relate to optimising processes and improving machinery to achieve sustainable agricultural practices. R&D activities may also address challenges faced by the industry such as:
- Animal and plant disease
- Impacts on the environment
- Shortage of resources
- Quality and safety standards
Developing new technology such as robotics and drones to create efficiencies and reduce wastage in farming is another key area of innovation and development that promises exciting new careers and opportunities for rural areas.
About the R&D Tax Incentive
Unlike a grant, where you need to compete with other businesses, the R&D Tax Incentive is available to any company conducting eligible R&D activities. That is, working from a hypothesis and conducting a program of work to develop new knowledge for the benefit of the industry.
It doesn’t matter how large or small your business is, providing you are operating through a company and you have an expenditure of $20,000 or more on research and development expenses, you may be eligible. Nifty R&D or a consultant can help you determine if you're eligible based on your specific business activities, and help you process your claim.
If you’re spending less than $500,000 on R&D PwC’s online platform Nifty R&D is a great place to start and can provide specialist advice for the agricultural industry. It’s free to check your eligibility - register online.
If you have a large spend of more than $500,000, PwC offers R&D consulting services.