As Farmers and Ranchers seek improved crop yields and livestock practices through experimental means, there is often risk involved beyond what is routine. In these cases, it is possible that experimental farming practices qualify for Scientific Research and Experimental Development (SR&ED) incentives, eligibility for which is not always straight forward.
This post explores some of the ways in which novel or experimental farming and ranching approaches can be eligible within the SR&ED eligibility criteria.
Understanding the Industry: Agriculture and Animal Husbandry
Often agricultural practices are selected based on a history of successful implementation in the local area and use in industry. These practices can be unique to different growing areas or livestock types/breeds. When attempts are made to expand on industry practices through experimentation to acquire new knowledge, those experiments may be SR&ED eligible. The following list includes possible eligible SR&ED activities, but is not exhaustive:
- Testing cattle process changes proposed to positively affect Pregnancy rate
- Experimental crop planting outside of recommended/established norms, to test a hypothesized yield or quality improvement
- Process/technological changes to support planting of a crop not commonly grown in the area due to environmental challenges
Central to experimentation that takes place in an agricultural setting is consideration of the operational environment. The intent of novel practices in a farm setting is most often to improve yield, output or reproductive efficiency, though deviation from the established norms. Where this deviation from known processes introduces elevated risk the possibility of SR&ED eligibility is often present.
Where SR&ED can be found in Agriculture
To qualify for SR&ED, work must go beyond routine practices to establish new scientific knowledge to achieve an objective. Systematic investigation is required to advance understanding of the underlying mechanisms/concepts/principles supporting the development; this means the establishment of a hypothesis which is being tested by the novel practices, and the recording of data/results to evaluate the hypothesis.
Examples of Non-SR&ED work:
- Incorporating different herbicides in commonly used concentrations for their intended purpose
- Trial and error/scattershot approach to optimize crop yields/pregnancy rates
- Incorporating a third-party service (smart irrigation monitoring, livestock health monitoring devices, etc.) without the need for deeper conceptual understanding or development
Examples of potentially eligible SR&ED eligible work:
- Seeking significant step change in crop yield/nutrient quality through a considerable process change from the status quo which has not been attempted, requiring new knowledge, scientific understanding
- Standard methods are unable to achieve the sought after goal, prompting systematic investigation to generate novel conceptual knowledge
- Experimentation with livestock practices outside of the known/standard, with no available guidance and unknown outcomes
Key questions to identify SR&ED Potential
To assess whether your agricultural project may qualify for SR&ED, ask:
- Did we face a clear scientific limitation or uncertainty?
- Was the outcome uncertain at the outset and additional risk brought on by the attempted process change?
- Was new knowledge generated that can be utilized in the future?
- Were the effort and work involved in this project beyond routine?
- Was there elevated risk in this project?
- Were data or results recorded to compare the experimental processes to those established in industry?
Conclusion
The scope of operations on a farm or ranch is broad, busy and complex. Identification of potential SR&ED opportunities in agriculture or animal husbandry is often not front-of-mind and can be challenging to identify but can exist in many forms. When experimenting with novel processes and seeking improvements from the status quo, understanding where SR&ED applies can unlock valuable funding opportunities.
Maybe you are trialing novel practices to increase cattle reproduction rates, attempting to improve crop yield through innovation departing from established norms, or endeavouring to successfully grow a crop which has not been produced in the area through unique methods, we can help you to maximize potential funding through SR&ED.
Ready to Investigate if you're operations qualify?
Contact us today to learn how we can help you innovate smarter and achieve operational excellence.
