How R&D Tax Credits Help Farmers Regenerate Soil – and Savings

Written by Corporate Tax Incentives. Updated Aug 11, 2019.

RD_Farm_StarfishThe starfish. These colorful invertebrates – not actual fish – troll all ocean floors of the world, from tropical seas to frigid waters. And whether they boast the common five-arm tally or a freakish forty, the sea star can regrow any one of them.

If a hungry king crab makes lunch of a starfish limb, no problem. The appendage will regenerate, and in about a year or so, the sea star can laze about the sandy bottom with a full set of functional arms, once again.

A few species can even do the reverse – grow a whole new body from a cast-off limb. Quite amazing that excessive starfish populations haven’t overrun our oceans.

However, we do have quite an elevated human population on land – even though we can’t regenerate body parts. Yet. Nevertheless, this population growth is what has spurred farmers to consider regeneration. Soil regeneration, that is.

Repair or Despair

Demand for food production - whether from megafarms or small independents – of course, parallels human population. In 1955, 2.55 billion people bustled about the earth. Today, the earth supports 7.7 billion.2 A bit of an increase.

To meet the accumulating food demand, we’ve over-farmed our soils and stressed the lands that deliver our sustenance. In response, many farmers are working towards viable solutions to correct this through ‘regenerative farming’ techniques.

Arms of Regeneration

Farmers who participate in regenerative agriculture are on a mission to naturally revitalize overused, depleted soil, and thereafter maintain the land’s rich health status.

The practice works to reduce nutrient runoff, improve crop and soil resilience to extreme weather, establish biodiversity, and ultimately renew and maintain soil at a more nutrient-rich state - that will, in turn, spawn more mineral-rich food at higher yields.

Regenerative farming methods include fall and winter cover crops, crop rotation, tillage reduction or elimination, and compost usage. Often organic practices accompany the efforts as many farmers are becoming increasingly concerned over chemical fertilizer and pesticide repercussions.

Cultivating Innovation: The Power of Agriculture and the Research Credit

Regeneration Nation

As early as the 1980s farmers began to experiment with regenerative agriculture as an answer for soil depletion, but it’s taken some years to evolve to a large-scale effort.

A farmer in Kansas uses ‘no-till’ and cover crops to harvest soybeans, cereal crops, and corn. He claims these methods require less fertilizer and herbicide, and his input expenses remain consistently and significantly lower than those of peers who haven’t yet adopted the eco-friendly practices.1

In addition to the inherent savings regen farming can provide, there’s another route to recast farmers’ efforts back into cash: R&D tax credits.

Tax Credits for Further Benefits

The federal research and development (R&D) tax credit shoots out a dollar-for-dollar reduction in a farm’s federal tax liability when it conducts qualified activities associated with developing new or improving processes, products, techniques, software, or inventions.

Regenerative agriculture intents and methods can fit nicely into the tax credits requirements. Pursuing regen activities proposes to improve processes, techniques, and products – a farmer’s harvest and livestock are his product.

The government also offers additional options to compound savings, such as the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) that reward farmers for planting cover crops.

Regen for the Mend

Our world has tasked farmers with a difficult challenge to feed our growing population yet not destroy the very resources required to do so. They’ve discovered techniques to regenerate the land and soil, and R&D tax credits are here to help them repair it.

Of course, with technical intricacies and ever-mutating regulations and requisites, government tax credits can intimidate a busy farmer. The guidance of a trained tax specialist can help a motivated farmer reap his maximum credit potential and regenerate tax dollars into functioning funds for further improvements.



What Can R&D Do For You?  Discover a practical approach to maximizing your federal research and  development tax credit. Download Guide

  1. Regenerative agriculture could save soil, water, and the climate. Here’s how the U.S. government actively discourages it., New Food Economy, 2019
  2. Current World Population, worldometers, 2019
  3. Regenerative agriculture: how it works on the ground,, 2019

Topics: R&D Tax Credit

Corporate Tax Incentives

Written by Corporate Tax Incentives

CTI is a tax incentives specialty firm that secures greater tax credits for businesses with our proven project methodology and unparalleled personalized service. For almost 20 years, our elite tax professionals have proactively engaged clients to deliver unmatched value with transparency and efficiency thorough secure in-house software, comprehensive audit-ready deliverables, and 24x7 access to real-time dashboards. We are tax consultancy experts passionate about maximizing credits and incentives for powering the success of your business.