VERTICAL FARMING: ALL IT’S STACKED UP TO BE?

Author: Maia Reed

Among forward-thinking foodies, vertical farming has been touted as a tech-savvy solution to feeding our increasingly urbanizing world. But do the benefits truly add up?

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THE NEED

By the year 2050, the United Nations anticipates that the global population will reach 9.7 billion, with 66% of people living in urban areas. To feed this rapidly growing, urbanizing populous, we’ll need to increase food production by 70% worldwide. There’s no dispute that creative solutions are needed to achieve future food security.

Growing more food, the obvious solution, is easier said than done. Most viable farmland has already been cultivated, and exhausted soils are losing their fertility. Creating more farmland means cutting down forests, which catalyzes climate change. Farming for a living is regarded as passé, and the average age of US farmers is increasing as young people move to cities to pursue higher wages. This means food must be transported further and further as population densities shift. 

The obvious innovation has been to bring the farm to the people. Over the past decade, numerous forms of urban farming have been popping up to meet the needs of city residents. But where the production capacity of urban farms and rooftop gardens continues to be limited by square footage, the ability of vertical farms to grow upward, rather than outward, give them potential to produce at competitive and impactful scales.

THE PROMISE

Vertical farming shows the potential to create a stable source of fresh food close to urban centers. Both its sustainability and production claims are impressive. Indoor crops can be grown year round under LED lights, in temperature and moisture controlled environment. Facilities have a small geographic footprint, minimizing land use. Pests and weeds can be controlled in a sterile environment, eliminating the need for chemicals. Transportation emissions are minimized by bringing food production closer to population centers. And a shortened supply chains helps produce maintain its nutritional benefits.

Vertical farms currently operate in many industrialized nations, particularly those with dense urban centers. In North America, the vertical farms currently in operation are providing some staggering statistics. New Jersey’s Aerofarms, the nation’s largest indoor growing facility, claims it is 390 times more productive per square foot than traditional farming, while using 95% less water. It spent $30 million to get its facility up and running in 2016. Plenty, an emerging Bay Area-based vertical farming start-up with production facilities in San Francisco, Laramie, and Seattle, claims that its facilities have 350 times the yield of a soil-based farm, while using 1% the amount of water. The venture has raised $226 million in funding since its conceptualization in 2015, including backing from Amazon’s Jeff Bezos. Newcomer vertical farm Bowry claims it produces 100 times more produce than traditional farming, and has raised $7.5 million from investors like celebrity chef Tom Colicchio.

THE PUSHBACK

Despite these benefits, and the excitement that vertical farming has generated among growers and investors alike, the past several years have been characterized by industry failure. So much so, that in February the Aglanta conference featured a highly-anticipated panel entitled “An Examination of Shuttered Vertical Farming Facilities.” The list is long: FarmedHere in Chicago, LocalGarden in Vancouver, Podponics in Atlanta. Regardless of location, cost, or growing method, none of these farms were able to succeed.

With so many promising vertical farms shutting up shop, it’s hard not to wonder: what’s going wrong? If millions of dollars in start-up capital isn’t enough to keep these farms afloat, then what can? And if they can’t succeed in industrialized nations, how could they possibly show success in other parts of the world? Perhaps it’s worth considering if vertical farms have the ability to truly tackle the complex issues they supposedly seek to solve.

Feeding the world?

The vast majority of vertical farms grow greens and herbs. These delicate, quick to mature, crops demand high prices and benefit from shortened transportation chains. Some farms have experimented with growing strawberries, cucumbers, and other produce, but most have yet to send these items to market. Growing tree or bush fruits, root crops, or vegetables with annual cycles in vertical farms seems far-fetched and space and cost inefficient, even if some claim that it can be done. And using vertical farms to grow wheat, rice, or corn – the staple crops that provide over half of the world’s calories – is out of the question, seeing as they are barely profitable even when grown at immense scales.

Breakdown of average daily calories consumed globally, by food source (image credit: National Geographic)

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Moreover, the exorbitant investment needed to start a vertical farm is prohibitive for producers in low-income areas, where fresh food is needed most. Retail costs for vertically farmed premium produce also price out low-income consumers. It seems hard to understand, then, how vertical farms can provide food security either calorically or geographically.

Combatting carbon emissions?

The sustainability claims made by many vertical farming operations neglect to mention what may perhaps be their most important environmental impact – carbon emissions. While bringing food sources closer to population centers does cut down transportation emissions, powering a 24/7 indoor operation filled with grow lights does not. Facilities such as Philadelphia’s Metropolis Farms plan to run at least partially off of solar power, which reduces their emissions substantially. But solar panels are still costly, utilize the existing grid, and require space to lay out – space that most small-footprint vertical farms don’t have. And, considering energy conversion ratios, it seems a bit backwards to harness the sun’s energy through photovoltaic cells, to capture energy to power LED lights, to grow…plants. Isn’t that what photosynthesis is for?

While some regions have neither the climate nor soil to grow a variety of vegetables year round, a bit of carbon calculating is in order before deeming vertical farming their best bet. More likely, growing climate appropriate crops that restore soils and importing fresh vegetables will be a smarter move for net emissions.

Cost effective production?

Finally, there lies the elephant in the room (greenhouse?): money. Getting a commercial vertical farm up and running requires a substantial sum – even the tiniest operations are cited as costing anywhere between $110 thousand and $261 thousand to get up and running. There’s the facility, the infrastructure, the lighting, the HVAC, the seeds, the nutrients, the marketing, the packaging, and more.

Failed vertical farmers report that one of their most overlooked costs was labor. Vertical farming requires laborers have to a basic level of horticultural training, and most farms are socially-driven businesses that strive to pay their employees above a minimum wage. However, labor costs tend to eat into the already tiny profit margin of fresh vegetables. While some farms try to stay afloat on their start-up capital while working out how to maximize employee scheduling, many run through their funds before ever becoming financially viable. Farms like Plenty acknowledge the prohibitive cost of labor, and have plans to increasingly automate the harvest process as part of their business model. But does this mean that, in order to be viable, vertical farming can’t contribute to local economies by creating new jobs in food production?

While investors are gambling with $10 thousand, $25 thousand and even $200 thousand bets on new ventures, American farmers are struggling. While in 2016 the median annual wage of an American farmer was a respectable $66 thousand, the farm sector’s debt-to-income ratio is at its highest level in three decades, which means most American farmers are currently operating in the red. With all this sunk capital in vertical farming, and little to show for it, could it be more effective to divert funds towards revitalizing our soil-based farming system instead? Investment is important to support agricultural innovation, but at what point are investors simply throwing away money that could be used to enhance farmers’ livelihoods, and attract more young people into the trade?

THE BOTTOM LINE

Vertical farms have emerged in response to concerns about feeding a rapidly growing, rapidly urbanizing planet. However, their ability to provide an economically viable, environmentally sustainable solution to local food security remains to be demonstrated in North America, let alone in low-income countries. Perhaps, with the high level of investment and global aspirations of vertical farms like Plenty, we’ll see some models brought to scale before earning windfalls profits – much like the expansion of Amazon. But until then, to feed our growing population, it may be most effective to focus on ensuring the equitable distribution of the food we already have.