SR&ED for the Agricultural Industry: R&D Tax Credits and Incentives
Canada's agriculture industry is increasingly adopting new technologies, processes and production methods to improve productivity, efficiency, sustainability and resilience. From precision agriculture and automated equipment to crop science, livestock production and food processing, agricultural businesses may undertake research and development activities that qualify for the Scientific Research and Experimental Development (SR&ED) program.
EVAMAX helps agricultural businesses identify potentially eligible R&D activities, determine qualifying expenditures and prepare SR&ED claims to access available tax incentives.
Can Your Agricultural Projects & Development Qualify for SR&ED?
Agricultural businesses can conduct SR&ED when they are attempting to achieve technological advancement or solve a technological uncertainty through systematic investigation or experimentation.
Not every improvement or change to an agricultural operation qualifies. Routine farming, production, testing, or the adoption of existing technology generally does not qualify simply because it involves new equipment or processes.
Agricultural R&D can take many forms depending on the business and the technological challenge being addressed.
Examples of Potential SR&ED Activities
Crop Production and Plant Science
- Developing methods to improve crop yield, quality or resilience
- Developing methods to manage crop diseases, pests or environmental stresses
Agricultural Equipment and Automation
- Developing precision planting, spraying or harvesting technologies
- Developing sensor-based monitoring and control systems
Livestock and Animal Production
- Testing methods to improve animal health or production efficiency
- Testing environmental controls for barns or other production facilities
Agricultural Processing and Agri-Food
- Testing new processing, drying, milling or preservation methods
- Developing new formulations or ingredient combinations
What Agriculture costs may qualify for SR&ED?
Once a project has been identified as potentially eligible for SR&ED, the next step is determining which expenditures are associated with the eligible R&D work. Depending on the nature of the project, potentially qualifying expenditures can include employee labour, materials, contractors, specialized equipment and certain lease or capital expenditures.
Labour
Employee wages can be a significant component of an SR&ED claim when employees are directly involved in eligible research and development activities.
For Ag-Tech companies this may include engineers, scientists, technicians, process specialists or software developers working on activities such as:
- Developing and testing new agricultural methods
- Developing automated monitoring or control systems
- Investigating ways to improve process efficiency, yield or reliability
Materials
Contractors and Specialized Services
Lease and Capital Expenditures
Recent changes to the SR&ED program have made certain qualifying capital expenditures incurred after December 15, 2024 eligible for SR&ED.
What Type of Activities May Qualify?
The key question is whether your business is working to overcome a technological challenge that could not be readily resolved using existing knowledge or standard practices.
Your agricultural project may be worth investigating for SR&ED if your business is:
Dive deeper- Developing or improving an agricultural product, process or technology
- Conducting experiments, trials or systematic testing
- Developing prototypes or pilot-scale processes
- Working to improve efficiency, reliability, yield, quality or performance
- Developing new automation, monitoring or precision agriculture technologies
- Developing new environmental or resource-management technologies
- Using engineering, software, data analysis or technical testing to support experimental development
Other Funding Opportunities for Agriculture Businesses
Other forms of government funding for agricultural businesses are available too. Depending on the project, company, location and activities involved, additional funding may be available through federal, provincial and regional programs.
Potential sources may include:
NRC IRAP (Industrial Research Assistance Program):
Provides expert advisory services and non-repayable contributions or wage subsidies to help AgTech companies accelerate technical R&D, optimize prototypes, and scale innovations.
AgriInnovate Program:
Dedicated federal funding targeted at commercializing, demonstrating, or adopting innovative, market-ready technologies and processes that enhance agricultural productivity, competitiveness, and sustainability.
SCALE AI Supercluster & Protein Industries Canada Supercluster:
High-impact funding streams designed for businesses leveraging artificial intelligence, supply chain optimization, or advanced plant-protein innovation and food processing.
Mitacs (Accelerate & Elevate):
Co-funded research internships that allow agricultural and AgTech firms to embed top-tier Master's, PhD, and postdoctoral scientific talent directly into their R&D pipelines—covering soil science, agronomy, or data modeling—at a fraction of the cost.
Funding programs can have specific eligibility requirements, application periods and eligible-cost rules. In some cases, SR&ED and government funding may interact, so businesses should consider their available incentives when planning and documenting a project.
How EVAMAX Can Help
Navigating Canada's tax incentives and grants can be complex. A single project may involve R&D activities, capital investment, manufacturing, commercialization and expansion, each of which may have different eligibility requirements.
EVAMAX can help you assess your project and identify the SR&ED, tax credit, grant and funding opportunities that may be available to your business.