Chapter 1
Cities should aim to produce at least 30 per cent of their own fruit and vegetables by 2030 through tech-enabled food production.
Thanks to technology, growing crops is no longer constrained by traditional growing cycles, soil health or weather conditions – which is a good thing because these factors are no longer reliable. Rather, as a result of climate change, they vary drastically and are often unpredictable.
Further, the long and complex supply chains that bring food to our cities are vulnerable to extreme weather, political instability – such as the current crisis in Ukraine – and pandemics, as illustrated by empty supermarket shelves during Covid-19.
It is estimated that by 2050, two-thirds of the world’s population will live in cities and will consume 80 per cent of all food produced. Cities must leverage technological innovations – particularly indoor vertical farms, greenhouses and precision-farming tools – to feed their growing populations.
By leveraging innovations in urban agricultural technology (“urban agtech”), city leaders can diversify their food sources, thereby increasing their food resilience in the face of the growing threat of insecurity from general and nutritional scarcity – in particular, the lack of essential micronutrients like vitamins and minerals. And they can do so while dramatically minimising the use of pesticides or chemical fertilisers and taking up much less land than required by conventional agricultural methods. Land that would otherwise be used to feed growing urban populations can instead be conserved as carbon sinks and wildlife habitat.
In addition, urban agtech can bring badly needed investment and desirable jobs to neighbourhoods. Derelict buildings and vacant warehouses can be converted into thriving businesses that provide nearby residents with fresh, healthy produce that travelled minutes, rather than days or weeks, to reach them, thereby preserving taste and nutritional value. These facilities will offer skilled jobs in comfortable, climate-controlled settings, drawing in a new pool of workers.
While most cities focus on incorporating clean energy or clean transportation into the built environment, more must concentrate on creating resilient food systems. Governments should help urban-agtech entrepreneurs scale their businesses and support further technological innovation. Too often, land-use regulations are a barrier for would-be entrepreneurs; instead, policymakers should leverage these as tools so that food resilience becomes a key part of the urban fabric.
A Ten-Point Plan to Boost Food Resilience in Cities
1. Grow 30 per cent of produce by 2030.
Cities should aim to grow 30 per cent of the fruit and vegetables consumed within their borders and the peri-urban area by 2030 to create a “buffer” against supply-chain disruptions, use land more efficiently, decrease food miles, and attract investment and good jobs, among other benefits.
2. Treat urban space as an agricultural asset.
City officials can maximise the potential of urban spaces by connecting gardeners and entrepreneurs to vacant lots, buildings and rooftops.
3. Update land use and permit regulations.
Ambiguous and overly complicated permit requirements can stymie would-be entrepreneurs. An explicit new land-use category for indoor farming would help.
4. Incentivise crop growing in new and existing commercial buildings.
Commercial buildings are a rapidly expanding sector and can be leveraged to produce food.
5. Attract commercial investment by sharing capital risk.
Two of the primary barriers to adoption of indoor vertical farming and other urban agtech are high upfront capital costs and the long-term horizons for return on investment. Government support is necessary to bridge the gap until these endeavours become profitable.
6. Support research and development to optimise technology and bring down costs.
Funding and other support is needed to further urban agtech and supporting tech, such as more efficient light-emitting diodes (LEDs). Doing so will reduce energy use and therefore increase the cost-effectiveness of urban agtech overall.
7. Educate the next generation of urban-agtech entrepreneurs.
Urban farming provides an excellent solution to the decline of the agricultural workforce, but scaling urban farming will also require new kinds of skills and talent. Internships, school initiatives, masters programmes and a greater awareness of urban-agtech careers can help.
8. Update labelling requirements.
Often, produce grown indoors can’t be labelled as organic even if pesticides have not been used because it is not grown in soil. Appropriate labelling is necessary to increase transparency for consumers and improve consumer confidence in these products – either a new “controlled-environment agriculture” label, or expansion of the “organic” label.
9. Ensure controlled-environment agriculture lives up to its environmental promise by establishing appropriate benchmarking and addressing the energy-intensity problem.
Vertical farms are energy intensive but there are steps city leaders can take to help ensure this energy comes from renewable sources. This includes making subsidies and other support contingent on showing that best practices, such as those that will be published by the Resource Innovation Institute, are being followed. Policymakers can also explore the potential of microgrids and should encourage controlled-environment agriculture companies to take part in demand-side response markets.
10. Preserve existing urban produce.
Many urban and peri-urban areas already have thriving, diverse local food systems that are at risk and must be preserved.
Chapter 2
Cities house most of the world’s population and, consequently, drive most of the demand for produce. However, they often rely on other regions to supply their fruit and vegetables, exposing themselves to the risk of climate-change impacts and supply-chain disruptions. The need for resilience in urban food systems, defined as the ability to respond to shocks and stressors, is more pressing than ever before and will only increase in importance in coming years.
The Threat of Climate Change
Climate change is already impacting agriculture via heavy rainfall, droughts and other extreme weather events that make farming challenging and unpredictable. Many cities rely on food imports from regions where the climate is becoming less stable.
One study has found that overall crop yields are already 21 per cent lower than they would have been had the climate remained the same as it was in the 1960s. In 2019, the Special Report on Climate Change and Land warned that a food crisis is on the horizon should carbon emissions go unchecked. If emissions continue to rise at their current rate, one-third of global food production will be threatened. Future risks will depend on action taken today, but there is a consensus that many risks cannot be avoided.
Climate change and disruptions to food production are already leading to rising prices, contributing to a cost-of-living crisis in the UK and elsewhere. Many basic food items have risen in cost, partly due to lower harvests because of poor weather.
The Fragility of Food Supply Chains
As globalisation has increased, many cities depend on longer and more complex supply networks. There are, of course, some benefits of longer and diverse supply chains: for example, a city or region is less reliant on any one area or crop. But these longer and more complex supply chains, from farmer to urban consumer, can also be more vulnerable to risks and are often more difficult to regulate and manage.
Pandemics are one such risk. Millions worldwide experienced hunger during the Covid-19 pandemic, exacerbated by lockdowns, travel bans and social-distancing measures that affected production and supply routes. Indeed, the lack of agricultural workforce threatened the whole European supply chain. Long supply chains are also more vulnerable to food-borne diseases like E. coli.
Political turmoil in a sourcing region can impact supply chains in several ways, including shipping delays, employee turnover and a changing value proposition (for example, if agricultural subsidies are revoked). The current war in Ukraine has contributed to a fertiliser shortage, leading to higher food costs and decreased production in many areas.
Today’s supply chains also lead to food waste. Many growers sell to only one buyer for the sake of efficiency; if the buyer falls through, the grower often throws the produce away. Around 14 per cent of food is lost or wasted in supply chains, either from harvest, transport, storage or processing (notably, this figure does not include food wasted at retail or consumption levels: in the UK, for example, 20 per cent of food waste is associated with food processing, distribution or retail).
The Challenge Ahead
Overall, the Economist’s 2020 Global Food Security Index shows that worldwide food security is deteriorating. Yet many cities are betting that food production elsewhere will remain stable.
In the 1970s, the majority of countries around the world were mostly food self-sufficient. Today, almost 80 per cent of the world depends on imported food.
For example, in the 1920s Paris sourced 99 per cent of its vegetables locally, whereas the figure now stands at just 2 per cent. Germany and the UK each depend on agricultural imports grown on approximately 80 million hectares of land – an area more than three times the size of the UK. As urban populations increase, without action, the percentage of food they produce for their own population will decrease further.
Some countries and cities, particularly those with very limited land and a high reliance on imports, are taking steps to prepare for these challenges. For example, Singapore has set a target to produce 30 per cent of its own food by 2030. The United Arab Emirates (UAE) has also emphasised food security over the past few years, mostly by adopting advanced technologies. The UAE has set a target to become the world’s most food-secure nation by 2051, and has set out a national strategy for food security. The EU’s Farm to Fork strategy also aims for a greater proportion of locally produced food.
But many other countries are not so prepared. For example, the UK imports around half its food, including 45 per cent of its fresh vegetables and 84 per cent of its fresh fruit, despite the fact that more than 70 per cent of its land is used for agriculture. Fruit and vegetable supply in the UK is increasingly dependent on imports from climate-vulnerable countries. The UK also relies on seasonal migrant labour to harvest domestically grown food but the combined forces of Brexit and Covid-19-instigated travel bans have compromised this labour force. Labour shortages and the UK’s high reliance on imports threaten the resilience of the UK food system. As a result, many experts have called for a new strategic plan to grow more food sustainably in the UK.
At the same time, urban populations all over the world are growing. Six billion people are expected to live in cities by 2050 – around two in three people. To ensure that these growing cities have food to eat in the future, policymakers must plan for food resilience now.
Chapter 3
A city can increase its ability to withstand both short- and long-term shocks and stressors to its food supply by implementing a variety of mechanisms, such as strengthening supply chains, decreasing food waste and investing in nearby regenerative farms that can better withstand climate-change impacts. Indeed, diversity is the cornerstone of food resilience. However, a key component of urban food resilience is increasing food production in urban and peri-urban areas.
Urban crop production can take several forms, including individual gardens, community gardens and commercial-scale endeavours. It can use conventional growing practices (that is, growing plants in soil with sunlight) or can leverage technological innovations to grow crops indoors, in small spaces and even on urban rooftops. These innovations include indoor vertical farms and precision greenhouses (collectively also known as “controlled-environment agriculture” or CEA) as well as other supporting tech.
The mix of technologies and food-production mechanisms a city employs will vary depending on factors like weather, availability and cost of land, access to capital and the provision of renewable energy.
Ultimately, urban food production requires a paradigm shift. It is often assumed that cities are concrete centres that pull in supplies from the periphery when, in fact, cities and their surrounding environs have the potential to sustain supplies for a significant proportion of their populations. Vacant lots, office buildings, rooftops and even supermarkets could be repurposed as agricultural assets. Zoning, land-use regulations and building codes should reflect these priorities.
An urban building with an indoor vertical farm (IVF), a greenhouse on the roof and fruit trees on the perimeter (mock-up below)
Source: TBI
Indoor Vertical Farming
Vertical farms create optimal growing conditions for plants by tightly controlling environmental conditions such as CO2, temperature, light, humidity, nutrients and pH levels. They leverage artificial intelligence, data analytics, and monitoring and sensing to keep plants healthier and even increase the speed of their growing cycles. They tend to be based in warehouse-like buildings, although old shipping containers and even an abandoned bowling alley have housed vertical farms.
Aeroponic vertical farm in a repurposed shipping container in Bristol, UK
Source: Jack Wiseall, LettUs Grow
Vertical farms grow crops without soil. The majority use hydroponics, a method in which plants are grown in a mixture of water and nutrients in lieu of soil or substrate. Some vertical farms use aeroponics, where plants are grown in a mist environment. Finally, some use aquaponics, where fish are farmed in tanks and the resulting nutrient-dense water is used to grow vegetables hydroponically.
Vertical farms rely solely on artificial light. The reliance on LED lamps and air conditioners renders them extremely energy-intensive – they use many hundreds of times more energy than conventional farms. If this energy is provided by fossil fuels, the lifecycle greenhouse-gas emissions are enormous (see Figure 4). For this reason, vertical farms are only really a compelling option if powered by renewable energy.
However, vertical farms use about 95 per cent less water than field farms because they constantly recirculate condensation. They also use about 1 per cent of the land required for field farms. This allows them to be sited in or near urban centres, reducing food miles travelled and, as a result, dramatically reducing waste while preserving freshness and nutrients. Negative environmental impacts from transport, such as air pollution and greenhouse-gas emissions, are also reduced. And the less land used for crops, the more it can be managed as carbon sinks and wildlife habitat.
In vertical farms … lettuce can be harvested up to 12 times per year, compared with just twice a year in field farms
”The jobs in these facilities are safer than in field farms. Instead of back-breaking labour in the sun, workers are in climate-controlled rooms working with computers and robots. Furthermore, there is much less exposure to pesticides. These higher-skilled jobs will be more attractive than traditional agricultural-labour jobs, expanding the pool of potential workers and addressing labour shortages in many high-income countries. Training and education can bridge the skills gap between the two types of work.
The tightly controlled growing conditions in vertical farms are completely divorced from the climate outside. As a result, lettuce can be harvested up to 12 times per year, compared with just twice a year in field farms. For some crops, indoor harvests can occur even more frequently.
Vertical farms are a promising solution in areas with poor external growing conditions where residents must either import fresh produce from far away or go without. VH Hydroponics, for example, sells customised vertical farms in Anchorage, Alaska, where in the winter the sun rises at around 10am and sets before 4pm. Similarly, Qatar’s sovereign wealth fund has invested many millions of dollars in InFarm, a startup that sells modular vertical-farming systems: in Qatar, summer temperatures regularly exceed 44ºC, rendering it far too hot to grow many vegetables. Its first growing centre will open in 2023.
Vertical farms will also be able to maintain consistent growing conditions even in the face of extreme and unpredictable weather events brought on by climate change.
Precision Greenhouses
Field farms have begun leveraging advanced technologies such as robotics, remote sensing and imaging to manage crop inputs (such as water and fertiliser) at a granular level to use resources more efficiently and increase crop productivity.
Precision greenhouses take these advanced technologies a step further by bringing them indoors. Precision greenhouses create optimal indoor growing conditions to grow produce in a maximally efficient way. These indoor farms resemble traditional greenhouses in that they rely primarily on natural sunlight. However, like vertical farms, they tightly control environmental conditions, have LEDs available to modulate light exposure and can grow food without soil.
Robots ensure basil receives optimal sunlight at a precision greenhouse in California
Source: IronOx
Precision greenhouses use advanced technology, data analytics and artificial intelligence to determine the optimal growing conditions for each plant. Advanced monitoring systems that rely on cameras, paired with a computer platform that uses AI and machine learning, can discern plant health, yield and nutrient content, adjusting growing conditions accordingly. For example, in IronOx’s pilot facilities in California and Texas, autonomous robots continuously move plants to capture the most sunlight throughout the day. The robots position the plants in front of cameras that photograph them daily so that AI systems can glean information such as plant health and growing trends. Sensei Ag, with a pilot facility in Hawaii, is another precision-farming company that adopts this approach.
As a result, precision greenhouses can grow high-quality produce with less water and only 10 per cent of the land of field farms, and often without pesticides. In sunny areas, they use up to 75 per cent less energy than indoor vertical farms. Because of their small footprint, these facilities can be located around cities, reducing food miles travelled. However, because they require more land than vertical farms, they are generally best suited to the peri-urban space – within a day’s travel from the city centre – where land is generally cheaper and there is less competition for water. Locating greenhouses on cheaper land will also help keep produce affordable for consumers.
Precision greenhouses can also grow plants faster than field farms, further increasing efficiency gains. They can grow a much greater variety of crops than vertical farms, including aubergines, peppers and cucumbers. Consequently, greenhouses are an important complement to vertical farming to ensure not only sufficient produce supply but also adequate nutrition.
Like vertical farms, these greenhouses create desirable jobs. Overall, precision-greenhouse farming is very promising, particularly in peri-urban areas.
Lower-tech greenhouses are also appropriate urban-agtech solutions in certain contexts. For example, where labour is cheap and plentiful, lower-tech greenhouses can supply jobs as well as produce that is cheaper but just as nutritious as that grown in a precision greenhouse.
Comparative environmental impact (e.g. water, electricity and land inputs)*
Source: Acgoustaki et al.; OneFarm Report
Precision Crop Breeding
Currently, both vertical farms and precision greenhouses are limited in the types of crops they can grow. Leafy greens, herbs, mushrooms and vine fruits (like tomatoes) respond best to indoor growing conditions and represent the vast majority of crops in commercial controlled-environment agriculture. Indoor farmers are currently experimenting with blueberries, raspberries, strawberries and other soft fruits, which show commercial promise.
Eventually, producers hope to grow rice, potatoes, and fruit and nut trees indoors. To do so, they will rely heavily on advances in plant genetics.
Gene editing, although often presented as controversial, holds significant opportunities. There are several issues policymakers must engage with to harness the benefits of gene editing while mitigating its risks and addressing consumer concerns.
Some companies, like the startup Cibus, use non-transgenic gene editing, meaning that they do not insert foreign genetic material into a plant’s DNA. Therefore, the resulting crops could have occurred via traditional plant breeding, albeit with the process sped up by decades or even centuries. These plants are not regulated as genetically modified organisms (GMOs) and this may go some way to addressing consumer concern.
Supporting Tech for Vertical Farms and Precision Greenhouses
A number of tech developments could support innovation within the growing environment itself. Advances in heating, ventilation, lighting and air-conditioning technology will support all controlled-environment agriculture. Prescriptive analytics will form the basis of decision-support technologies that can streamline day-to-day operations. Online marketplaces that connect growers to nearby customers could cut out intermediaries such as supermarkets, reducing costs for consumers and increasing profits for growers. And, of course, cheap and plentiful clean energy is a necessary precondition for climate-friendly indoor growing at scale.
Tech-Assisted Adaptability
A robust food system is a diversified food system. AI and data analytics can also support field farms, especially regenerative agriculture, as they navigate the unpredictable extremes brought on by climate change. For example, CiBO Technologies simulates field trials under different conditions, allowing farmers to adapt quickly to changing conditions without the need for expensive and lengthy field trials.
State of the Industry
Investment in both agtech and, more specifically, controlled-environment agriculture is growing rapidly. In 2020, investments in agtech startups reached $7.9 billion, a 41 per cent jump from 2019. In 2020, investments in agricultural biotech (crop breeding) and novel farming systems (primarily indoor farming) totalled $3.1 billion.
Controlled-environment agriculture companies are already operating commercially in the US, Europe and Australia. Several companies have gone public.
Some of the key players in controlled-environment agriculture (March 2022)
Source: Crunchbase, Pitchbook, Various. Note: Special Purpose Acquisition Company (SPAC)
Which Regions Should Consider Urban Agtech?
Progressive leaders who want to address climate change, create jobs and attract talent should start acting now to boost food resilience.
From landlocked capitals in large countries to cities in much smaller island states where tourists outnumber locals, many locations could benefit from greater urban food production. For example, the Bahamas imports almost 90 per cent of its food. Cities where food imports are at an especially high level are most susceptible to supply-chain shocks and would benefit most from increasing local production through investment in controlled-environment agriculture.
Similarly, vertical farms and precision greenhouses make sense in regions experiencing labour shortages due to an ageing population or a lack of interest in agriculture, as the associated farming mechanisms automate many functions and therefore provide fewer physically demanding jobs. For example, in Japan, one-fifth of the agricultural workforce is older than 65.
Other factors that render a city most amenable to vertical farms and precision farming include infertile or poor soil, risk of climate-change disruption and challenging weather conditions, as well as political risks that further jeopardise supply-chain integrity.
Finally, controlled-environment agriculture makes most sense in regions with access to plentiful and affordable sustainable energy or with plans to expand sustainable energy in the near future.
Not all cities will be suitable for indoor vertical farms. Despite advances in technology and productivity, some cities will be constrained in how much food they can grow based on the cost of land, space or energy considerations. In some cases, the peri-urban area, where land is often cheaper and space is more abundant, will be more appropriate for urban agtech.
Chapter 4
Ensuring adequate and affordable food for their populations has historically been a key objective of governments. Traditionally, governments have heavily intervened in their agricultural sectors to ensure farmer income and food supplies. However, evidence from the UN shows that of the $540 billion in subsidies given to farms each year, almost 90 per cent harms people and the planet.
Providing an alternative, urban farming could be a key part of ensuring adaptive, resilient cities. Below is a ten-point plan for policymakers who want to boost food resilience in cities.
1. Grow 30 per cent of fruit and vegetables by 2030
The commitment to greater food resilience relies first of all on political leadership. As a baseline, cities should aim to grow 30 per cent of the fruit and vegetables consumed within their borders by 2030. Some cities have already implemented similar targets: see, for example, Singapore’s “30 by 30” initiative (which also includes proteins), Brussels’s goal to grow 30 per cent of fruit and vegetables locally by 2035 or Paris’s commitment to grow 25 per cent of its own food by 2050.
Such a goal is eminently achievable. In Edinburgh, for example, growing 30 per cent of the population’s lettuce in vertical farms would require about 1 to 1.5 hectares – a fraction of the 235 hectares that are vacant or derelict. It would require the amount of water used only by 40 people each year. Energy is a limitation but can be addressed via implementing a diversity of food-production mechanisms, increasing access to renewable energy, generating energy on-site (for example, with solar glazing or solar panels on greenhouses) or repurposing a building’s waste energy and imminent efficiency improvements in LEDs. And, of course, these crops would not be transported over long distances, leading to energy savings in transportation.
Requirements to grow lettuce for 30 per cent of a city’s population using indoor vertical farming*
*This figure does not include required inputs for precision farming, which is a very promising urban-agtech solution that uses comparable amounts of water and land but much less energy.
Source: TBI
Case Study
Case Study: Lessons From Singapore
Small island states have features in common that make it difficult for them to assure food security though self-production, notably limited land, fresh water and labour. In Singapore, a lack of natural resources has been a driving force for progress, and the country has consistently been ranked high for food security in international comparisons.
Lesson 1: What gets measured gets managed
In 2019, the Singapore government announced its “30 by 30” policy agenda and public-awareness campaign, aiming to meet at least 30 per cent of its nutritional needs domestically by 2030.
Lesson 2: Progress is driven by significant government support for the industry
The Singapore government supports local food production with massive investments using a variety of strategies: training programmes, setting aside and tendering land to agribusinesses, and providing funding for education, research, facilities, expertise and startups to attract talent.
Lesson 3: Attracting the private sector is key
Singapore achieves this through:
Improving cost-effectiveness and transparency of doing business in Singapore.
Creating a hotspot of talent.
Subsidising upfront costs of necessary infrastructure and basic R&D.
2. Treat urban space as an agricultural asset
Urban space is a valuable agricultural asset. Cities should catalogue roofs, vacant lots and unused buildings, build a database of these assets, and connect them to entrepreneurs, non-profits and individuals who want to grow food there (generally, the owners of vacant lots and buildings are required to register them with the city, so the city has this data).
In many instances, the government owns this land. For example, Transport for London is one of London’s largest landowners, with 5,700 acres throughout the city. Some is being developed by large developers as homes, offices and retail space to generate revenue for the agency, and roofs on these buildings should include green space. Other plots are smaller and should be made available for housing associations, communities and small growers. Small plots that are not amenable for housing (perhaps they are too small or awkwardly shaped) should be set aside for growing food. For example, would-be farmers can “adopt” vacant, city-owned property through Atlanta’s “Grows-A-Lot” programme.
3. Update land-use and permit regulations
Urban agriculture does not fit neatly into existing concepts of commercial or agricultural land use. Aspiring entrepreneurs are often stymied by ambiguous or overly complicated zoning provisions. Often, growers must apply for a special permit to grow in an area designated as residential or commercial or to convert an existing building into an indoor farming facility. As a result, obtaining a permit for one of these facilities can be time consuming and costly. It can also be risky if farmers misinterpret the requirements or if restrictive requirements are enacted after permitting.
Cities should create a new land-use category for controlled-environment agriculture that provides for mixed uses and the retrofitting of existing buildings. Residential and indoor gardens should be allowed in every zone by default as long as they do not release effluent or other forms of pollution, as they are in San Antonio, Texas.
Cities should also create clear pathways for those looking to create urban farms. For example, Singapore has clear guidance for those looking to develop rooftop gardens.
4. Incentivise crop growing in new and existing commercial buildings
Commercial buildings represent not only huge energy expenditures and environmental impacts, but also a rapidly expanding sector. For example, in the US, commercial-building floor space is expected to increase by a third by 2050.
Policymakers should encourage commercial buildings to devote a certain percentage of floor space – about 15 per cent – to growing crops. This goal is analogous to requirements that commercial buildings provide parking spaces, often one for every 27.9m2 or even 18.6m2 of floor space. Since a standard parking space is 16.7m2 (plus even more space for necessary ingress and egress), this ratio is almost 1-to-1 of building to parking – an astonishingly unproductive use of valuable urban and peri-urban space considering the many detrimental social, environmental and economic harms stemming from private car use.
By contrast, on-site growing would increase food security, jobs, investment, foot traffic and environmental benefits.
Incentives can take many forms, including a certification scheme (like the Leadership in Energy and Environmental Design building-rating system), rebates, grants, tax incentives, technical assistance or financing mechanisms (such as property-assessed bonds or revolving loan funds).
This goal could be met by including vertical-farming components indoors such as InFarm’s modular units, which can measure as little as 25m x 25m x 10m. Alternatively, buildings could devote part of their roofs to greenhouses like BIGH’s aquaponic farm, which captures building energy loss and recycled rainwater to farm fish and grow fruit and vegetables on a roof in Brussels, or turn unused portions of their lot into urban gardens.
5. Attract commercial investment by sharing capital risk
Two of the primary barriers to the widespread adoption of controlled-environment agriculture are the high upfront capital costs and the long-term time horizon for return on investment. The high initial costs reflect the costs of real-estate, facility construction and innovative technology. Operational costs, which are also substantial, largely come from labour and energy.
As a result, vertical-farming systems take a long time to become profitable. For example, New Jersey-based AeroFarms, founded in 2004, expects to become profitable for the first time in late 2022. It’s estimated that around 60 per cent of indoor-farm operators in Japan are unprofitable because of the cost of the electricity needed to run their facilities (precision greenhouses that use only a fraction of the energy of indoor vertical farms are more likely to become profitable sooner). At the same time, traditional agriculture is highly subsidised, which makes it difficult for urban agtech, particularly indoor vertical farms, to compete.
Government support is necessary to bridge the gap and help create a sustainable long-term market. In 2021, Singapore’s food agency launched a “30 by 30” express grant, which offered SG$39.4 million to nine high-tech farms to boost local food production, but elsewhere subsidy regimes are still based on the 20th-century model. The US pays around $20 billion a year to farmers for income stabilisation, while agriculture and fisheries subsidies made up 35 per cent of the total EU budget in 2020. Urban agtech should be able to benefit from this pool of money.
The subsidy landscape for agriculture is changing in the UK, as farmers will no longer be able to access subsidies from the EU’s common agricultural policy (which amounted to around £1.6 billion a year in England), and instead will be paid for producing environmental goods. While some land in the UK will likely be returned to nature, the UK should still dedicate funds to producing its own food rather than exporting its environmental footprint by importing food from abroad. Subsidies should be directed towards food production that produces both environmental and social benefits.
Governments should also consider providing incentives for companies to convert unused buildings into indoor farms.
Finally, governments could help the development of urban agtech by setting targets for public procurement of local produce.
6. Support R&D to optimise technology and bring down costs
Governments should support innovations in this space by funding R&D. For example, the US Department of Agriculture’s Office of Urban Agriculture and Innovation Production has issued over $10 million in grants over the past two years (a figure that represents a tiny fraction of overall agriculture and dairy subsidies), and its National Institute of Food and Agriculture funds genomics research. Additional grants should be disbursed specifically to support urban-agtech innovation.
Support doesn’t just have to be through funding. In the UK, for example, the government provides innovators with a vertical-farm development centre they can use to develop their technologies and demonstrate proof of concept.
7. Educate the next generation of urban-agtech entrepreneurs
Urban farming provides an excellent solution to the declining agricultural workforce but scaling urban farming will require new kinds of skills and talent. Some studies show that a lack of knowledge is preventing today’s farmers from investing in new agricultural technology.
Governments should invest in educating the next generation of urban-agtech entrepreneurs and create a pipeline of talent necessary to scale the industry. Singapore has introduced an urban-agtech masters programme. New York City, which has recently established a new office of urban agriculture, is also working to develop interest and talent early on via, for example, its Grow to Learn school-garden initiative.
Governments should advertise urban agriculture as a viable career pathway and set out ways for young people to get involved. Countries should work with local farms and universities to introduce internships in urban farming. They should also set out pathways for existing workers in the sector to switch to urban farming. In Singapore, for example, the SkillsFuture Continuing Education and Training courses offer diplomas in agriculture technology. In the US, Washington, DC is working with schools to ensure that children receive at least ten hours of garden-based learning a year.
8. Update labelling requirements
Labelling should not be an impediment for aspiring entrepreneurs. Vertical farms and precision greenhouses don’t use traditional fertilisers and use little to no pesticides; often, the resulting produce needn’t even be washed because the environmental conditions in which it is grown are pristine. However, in Europe, soil-less produce cannot be labelled organic – even if it is grown without the use of pesticides. The rationale is that organic certification reflects efforts to preserve and improve soil health and controlled-environment agriculture does not use any soil. In contrast, US regulations allow for organic certification of soil-less produce.
The result is consumer confusion and bureaucratic hurdles. Some entrepreneurs would prefer a new label specific to controlled-environment agriculture that helps consumers understand its nutritional and environmental benefits. Others would prefer soil-less produce be labelled “organic”.
While such labelling is generally administered at the national level, local policymakers should consult entrepreneurs and advocate for a solution amenable to producers while still supporting soil health.
Appropriate labelling is also necessary to increase transparency for consumers and improve consumer confidence in these products. While any innovation in food runs the risk of being seen as unnatural by sceptical consumers, they are also increasingly concerned with the environmental impact of foods, including the use of pesticides. One study highlights perceived sustainability as the major driver of consumer acceptance of urban-agriculture systems. Therefore, it is important for producers to accurately label controlled-environment produce with its environmental credentials.
9. Ensure controlled-environment agriculture lives up to its environmental promise via appropriate benchmarking and thoughtful energy use
As shown in Figure 4, vertical farming is highly energy intensive. If energy does not come from zero-carbon sources, vertical farms risk having an adverse environmental impact. Although energy policy often doesn’t operate at the city level, there are steps cities can take to help address the energy-intensity issue.
While 62 per cent of controlled-environment agriculture farms worldwide track their energy use, only 28 per cent have provided such information in a credible format. There is a dearth of standardised benchmarking in this nascent industry, but this is changing. For example, the Resources Innovation Institute, a controlled-environment agriculture industry group that counts private-sector companies, academic institutions and government agencies among its members and partners, plans to publish a peer-reviewed best-practice manual this year. Policymakers should encourage controlled-environment agriculture operations that live up to their environmental promise, including by making subsidies and other support contingent on showing that best practices are being followed.
Microgrids, or local electricity networks, can provide local power generation and use renewable distributed-energy resources to help deliver power. City governments should explore the potential of microgrids in providing energy for urban farms and, where viable, help to establish them. In Maryland, Schneider Electric, Duke Energy and the Montgomery County government are collaborating on microgrids to power county facilities.
Where possible, governments should encourage vertical-farming companies to participate in demand-side response (DSR) markets.
DSR is where energy users (in this case the vertical farm) change their electricity-consumption patterns in response to a signal or incentive from the network operator to ensure that supply and demand are matched. In other words, when there is lots of supply (for example, because it’s a windy or sunny day), the energy user is incentivised to use more energy. Conversely, when there is lower supply, the user is incentivised to use less. DSR helps balance the grid and is crucial in supporting a transition to lower-carbon generation.
In the UK, vertical-farming producer Jones Food Company has partnered with Flexitricity to transform its energy profile through access to the demand-side response market. This means it will be able to earn revenue by providing electricity-system balancing services to the National Grid. The project is funded through the Department for Business, Energy and Industrial Strategy.
10. Preserve existing urban food production
Many urban and peri-urban areas already have thriving, diverse local food systems. For example, New York City boasts more than 550 community gardens on city property, more than 745 school gardens and more than 700 gardens at public-housing developments. The city is also home to several indoor vertical farming and other agtech companies, including FarmOne, Gotham Greens, Babylon Farms and Sky Vegetables. Other cities should follow New York City’s lead and maintain existing urban agriculture – including community gardens and school gardens – while also encouraging innovative agtech.
Twenty per cent of the food consumed in Sydney is grown locally, but this figure is predicted to fall to 6 per cent by 2031 in large part due to rising real-estate prices. City governments should pass ordinances and/or resolutions that explicitly preserve urban agriculture on public land for decades, if not in perpetuity, so gardeners and farmers are incentivised to further invest in these endeavours. Cities should encourage the preservation of urban agriculture elsewhere via community or conservation land trusts, among other means. Governments can donate surplus land or funds to such trusts or can support them with ordinances that offer tenants the right-of-first refusal.
Equity should be at the forefront of this endeavour. Many existing community gardens are tended by people on low incomes or by people of colour, providing invaluable access to nutritious food and green space. These urban gardens and farms must be protected.
Chapter 5
In the 21st century, the cities that can feed their residents in the context of growing urban populations, climate-change impacts and supply-chain shocks will be those that weave food production into the urban fabric. First and foremost, this requires a paradigm shift: cities can be hubs not just of food consumption but also of food production.
There are several tools at local policymakers’ disposal to help achieve this task, including updates to how cities are zoned, more buildings being given permits, the disbursement of subsidies and the education of workers.
Each of these interventions can help policymakers leverage innovations in urban agtech that permit nutritious food to be grown in small spaces, with little water and with very few chemicals and pesticides. But the starting point has to be a clear vision and focused political leadership.
The rewards for those leaders who seize the initiative go beyond food: transitioning from a food-consuming to a food-growing city is an opportunity for investment, economic opportunity and equity-building. The successful cities of the late 21st century will likely be those that have taken action early.
Acknowledgements
We would like to thank all those who helped inform this paper, including:
Patricia Romero, PhD, IronOx
Jonathan Anthony, Eden Botanics
Tim Lang, PhD, Centre for Food Policy, City University London
Michael Barron, Bayer
Mark Horler, UK Urban AgriTech
Kate Hofman, GrowUp Farms
Henry Gordon-Smith, Agritecture
Edwin Morgan, Harvest London
Milton Stokes, Consultant
David Douglas, Hannah Byrne and Jenna Bell, Sensei Ag
Lead Image: Getty Images