Is climate change behind the 103% increase in Agritech R&D claims?

The latest research by R&D tax credit specialists, RIFT Research and Development Ltd, has found that the number of R&D claims submitted within the agriculture, forestry and fishing sector has climbed 103% in the last four years.

In fact, the only sectors to see a greater increase in R&D claims growth are the accommodation and food sector and the real estate sector.

But it isn’t just the number of R&D claims that’s on the up. When it comes to the total sum claimed, agriculture, forestry and fishing also ranks joint fourth for the biggest increase over the last four years along with transport and storage – up 100%. Only mining and quarrying, admin and support services and construction have seen a higher sum claimed.

Agritech R&D focuses largely around how we can produce more with less and the development of technology enables us to improve the efficiency of production and increase crop yields, while at the same time requiring fewer resources such as land and water in order to do so.

We’ve come a long way from working the fields by hand and today Agritech R&D examples include a range of innovations including: –

  •  The use of drone technology
  • Sensor technology
  • Automated irrigation
  • Improvements in delivering products to market
  • Light and heat control to improve yields and reduce waste
  • Intelligent software analysis for pest and disease protection and soil management
  • Remotely operated vehicles
  • Big data to improve or adapt existing technologies and performance

The UK has become one of the leading forces in R&D Agritech advancements largely due to our leading science and research capabilities, our innovative and well connected farming supply chain and a dynamic business environment that encourages innovation through schemes such as R&D tax credits.

But why is Agritech such big R&D business?  

While it may seem a long, long time ago, the global population has increased from 1 billion people in 1800 to 7.7 billion today. To put that into perspective, this means that today’s population accounts for 6.5% of the total number of people ever to be born.

So we have a lot more people to feed but despite this, it’s estimated that 795 million people still don’t have enough food to eat.

But not only do we need to produce more food, but a changing climate requires us to adapt how we do this.

According to research by the Natural Environmental Research Council, CO2 levels have increased, so too has the average temperature since the 1980s. Rainfall has varied erratically, sea levels have increased, severe windstorms have become more frequent, as has flooding, while ground frosts have reduced.

All of these changes impact the way we farm and produce food by causing changes in forestry environments, horticulture, the way we rear livestock, the quality of the soil available, the temperatures in different farming areas, the risk of flooding and an increase in sea levels, as well as the availability of groundwater for irrigation.

No surprise then, that Agritech R&D has become one of the leading sectors in R&D as we try to balance existing issues caused by population growth with those developing due to a change in our climate.

Director of RIFT Research and Development Ltd, Sarah Collins, commented: 

“The advancements and developments being pioneered within the Agritech sector as a result of R&D do bring a benefit to business from a profit point of view. However, the focus is much bigger than money alone and in fact, it could be argued that Agritech is one of the most vital areas of R&D today.

While previous R&D advancements have allowed us to produce more food, more quickly, and with a smaller workforce, today’s focus is very much on how we can make this produce more readily available to those that need it through the development of existing frameworks and practices.

At the same time, we are also having to evolve with a changing climate that presents new obstacles in terms of the land we use, how we use it and what we use it for. This is no doubt the driving force behind the notable increase in Agritech R&D claims and demonstrates the fast pace at which the sector is changing and improving for the better.”

Industry sector analysis of number and cost of R&D tax credit claims
Number of claims 2014-15 2015-16 2016-17 2017-18* 2014-15 to 2017-18
Number of claims Number of claims Number of claims Number of claims Change
I. Accommodation & Food 105 165 255 230 119%
L. Real Estate 100 145 210 215 115%
A. Agriculture, Forestry, Fishing 190 295 405 385 103%
Q. Health & Social Work 270 350 500 520 93%
F. Construction 1,075 1,570 2,260 2,025 88%
K. Financial & Insurance 535 765 980 925 73%
R. Arts, Entertainment & Recreation 275 395 525 475 73%
P. Education 305 440 520 500 64%
N. Admin & Support Services 1,815 2,365 3,050 2,920 61%
D. Electricity, Gas, Steam and Air Conditioning 85 115 145 125 47%
M. Professional, Scientific & Technical 6,505 8,235 10,115 9,545 47%
S. Other services activities 560 690 850 815 46%
G. Wholesale & Retail Trade, Repairs 3,745 4,715 5,805 5,335 42%
H. Transport & Storage 300 380 475 425 42%
J. Information & Communication 8,505 10,255 12,410 11,635 37%
C. Manufacturing 10,155 11,625 13,270 11,925 17%
E. Water, Sewerage and Waste, 250 255 330 290 16%
B. Mining & Quarrying 90 95 105 95 6%
Total 34,880 42,855 52,210 48,385 39%
*Latest provisional data (Oct 2019). Some sectors are not included due to lack of claims or avilable data.
Source: Gov.uk
Industry sector analysis of number and cost of R&D tax credit claims
Industry sector Amount claimed (£ms) Amount claimed (£ms) Amount claimed (£ms) Amount claimed (£ms) Change
2014-15 2015-16 2016-17 2017-18* 2014-15 to 2017-18
B. Mining & Quarrying 30 65 95 110 267%
N. Admin & Support Services 80 120 170 190 138%
F. Construction 65 95 145 135 108%
A. Agriculture, Forestry, Fishing 10 15 25 20 100%
H. Transport & Storage 15 20 30 30 100%
K. Financial & Insurance 125 195 260 215 72%
G. Wholesale & Retail Trade, Repairs 140 180 240 235 68%
Q. Health & Social Work 15 15 20 25 67%
J. Information & Communication 495 655 805 820 66%
M. Professional, Scientific & Technical 630 800 990 1,020 62%
S. Other services activities 20 25 30 30 50%
E. Water, Sewerage and Waste, 15 15 20 20 33%
C. Manufacturing 960 1,060 1,335 1,250 30%
R. Arts, Entertainment & Recreation 70 70 95 75 7%
D. Electricity, Gas, Steam and Air Conditioning 15 15 15 10 -33%
P. Education 105 135 35 45 -57%
Total 2,790 3,495 4,330 4,260 53%
*Latest provisional data (Oct 2019). Some sectors are not included due to lack of claims or avilable data.

 

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.