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Incentives for agribusiness innovations

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agribusiness
// // A number of incentive programs can assist in supporting the earlier adoption and use of innovative agritechnologies in your business....

Innovation and technology have become huge proponents of allowing agribusiness to grow sustainably. A number of available incentive programs can assist in supporting the earlier adoption and use of innovative agritechnologies in your business.

As a fundamental primary industry which is a critical driver of the Australian economy, the recognition of the exciting innovation and developments within the agribusiness value chain has perhaps been understated and lost in translation.

Agritechnologies play a vital role in ensuring agribusinesses remain current, relevant and competitive. In some instances, cross-industry technologies may be able to transcend the industry divides for beneficial adoption into adjacent industries. While mining technological developments have had their moment, it is time to categorically bring to the forefront and recognise the thrilling innovations that the agribusiness sector delivers to the world.

Unfortunately, spending and investment in innovation are usually left to the wayside as other business and commercial priorities take precedence. There are a number of funding support mechanisms in reach for agribusinesses to access and allow them to unleash and propagate the human entrepreneurial spirit of their most important resource – people.

The R&D Tax Incentive (R&DTI) is the government’s flagship incentives program which allows eligible businesses to obtain an R&D Tax Offset (refund or saving of tax) on eligible R&D expenditure incurred on eligible R&D activities. Broadly, new or improved products, processes, services, materials and devices that agribusinesses develop may be able to access the R&DTI. Such developments may include:

  • New breeding techniques, genetic variants / hereditary improvements and farming methodologies to improve productivity and sustainability
  • Transforming and adopting digital connectivity such as satellite and drone technologies for real-time farming techniques and applications and use of ‘big data’
  • Developing and trialling new fertilisers, insecticides and pesticides
  • Equipment innovations and engineering services such as conveyor systems, spreader designs, spraying equipment

In addition to the R&DTI, Government and Industry Grants (GIGs) are available throughout the year via Federal, State (Territory) and Local Government programs along with funding announcements by other private and industry organisations.

It would be remiss to not mention the opportunity for startup companies (which have been incorporated for less than six years) to determine their eligibility as an ESIC (Early Stage Innovation Company). Generally, this tax-based incentive program allows qualifying investors a 20% non-refundable tax offset on their investment in new equity shares and a CGT exemption in holding those shares.  

To remain viable and grow sustainably, the unified agribusiness sector has become a leader in developing and adopting new innovative technologies for improved operational efficiencies.

Agribusinesses have become better recognised for their innovations and successfully access various incentives programs in support of their continued developments. The opportunity to commercialise these agritechnologies (within the industry or cross-industry) along with the benefits and rewards this can bring to both the agribusiness itself and the agri-sector as a whole, should also not be missed!

To find out more, reach out to your nearest local RSM office today.

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Incentives for agribusiness innovations
Steve Elias, RSM

Author Steve Elias is Principal in RSM’s R&D Tax team and also co-hosts the Startup West podcast.

Since 2007, Steve has provided specialist R&D tax advice to a range of diverse industries across Australia including Science, Technology, Mining, Agriculture and Engineering.

Preceding his R&D tax incentives career, Steve worked as an industrial chemist where his responsibilities included the development and synthesis of various products and substrates and the introduction and application of these into client operations.

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Picture of RSM Perth

RSM Perth

Having grown into one of Australia’s leading professional services firms over the last 100 years, RSM Australia is committed to enabling clients through a greater understanding of what matters most to their business. Providing ready access to expert corporate financial and advisory accounting services, RSM Australia’s one-firm structure underscores a client-focused culture. This culture nurtures strong collaborative client partnerships across growth-focused entrepreneurial businesses backed by industry expertise and longstanding relationships with the SME and startup community.
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