The sky’s the limit

Many Australians may find the idea of vertical farming absurd, given our country’s productive rural lands and expensive urban real estate. But use of this model of indoor, urban farming—where crops are stacked vertically in climate-controlled environments that ensure each plant receives optimal inputs for growth—is on the rise.

“Vertical farming is for developed countries with high-density populations. That’s where its future lies,” says John Leslie, Executive Director of Queensland-based Vertical Farm Systems, a privately owned company that has successfully designed growing systems that are fully automated from seeding to harvesting. The company is developing distribution networks internationally, with exclusive rights with agencies in Canada and Malaysia.

“The media’s image is that vertical farming will feed the world—no, it won’t. We see a great deal of issues getting vertical farming into China, for example,” he says. “Too many people there are living off subsistence farming and to try and displace them with automated technology wouldn’t be cost-effective or socially positive.”

In the optimised environment of Vertical Farm System’s climate cells, crops are produced year-round and yields are dramatically increased while water use and labour costs are drastically reduced.

“We can grow in 28 days what a person in the paddock takes 48 days to equal,” says Leslie. “The building is essentially unmanned, only needing one worker in it for four hours once a week to harvest and re-seed. The rest of the time it’s closed and fully automated and the system will send text messages if it has a problem.”

Leslie says a very promising market for vertical farming in Australia is the propagation of seedlings to grow-out in fields or greenhouses. “We can produce 40,000 seedlings a week in just one climate cell, which means growers can rapidly meet changing demands from the market. The fastest normal commercial nurseries can change direction and supply a new variety line is around 2–3 months.”

With more than 80 per cent of the global population expected to move into urban centres by the year 2050, vertical farming does offer a solution to offsetting potential future food shortages for some countries with dwindling agricultural space.

In land-poor Singapore, which imports 90 per cent of its food, Sky Greens is running the world’s first hydraulic-driven, low-carbon, urban vertical farm. One-hundred-and-twenty aluminium towers, each 9m tall with a rotating system of planting troughs, produce 0.5 tonnes of Chinese cabbage and other leafy green varieties each day—10 times more than traditional farming methods over the same area.

In Japan, vertical farming firm Spread Co.’s new Kyoto factory plans to produce 30,000 head of lettuce per day when it opens in 2017, and will expand to 500,000 head per day within five years. Its ‘staff’ will consist entirely of robots.

The Japanese government’s initiative to provide subsidies for investments in vertical farms has also seen iconic companies such as Toshiba join the game—it’s converted one of its warehouses and currently grows three million bags of lettuce a year without soil, using only a nutrient-rich mist.

However, these productive results are best achieved when growing leafy greens.

“It’s not commercially feasible to grow pumpkins, wheat or crops [that] take a long time to reach maturity,” says Leslie, “So I don’t think that Australia’s future food exports will be impacted.”

For countries like the Netherlands, the United States and England—all of which have large vertical farms in operation—one of the most appealing aspects of vertical farming is that it can localise the food source of urban consumers who demand huge volumes of fresh, ‘local’ food year-round. The same goes for Australia.

“We’ve got a great uptake from the Sunshine Coast community, with people asking for our produce in shops,” says Leslie, referring to the leafy greens grown within the company’s Coolum facility. “We cut our leaves 30 minutes before they’re in the shops, so they’ve got a great shelf life.”

Leslie says the success of any new vertical farming enterprise in Australia will depend on its ability to break into the niche markets and supply chains that can optimise their return on investment (ROI).

“We have a lot of people ringing up asking us how much the system costs,” says Leslie. “They should be asking ‘how much money will this make?’ The average vegetable farmer in Australia is getting a ROI of 2.6 per cent [ABARES, 2015], but most investors won’t get out of bed for that,” he says. “We’ve optimised our system to give a ROI of 20–25 per cent—but the costs of production per kilogram need to be absolutely precise.”

Furthermore, seedling propagation in vertical farms is not limited to your typical leafy greens. “We just did trials planting our broccoli seedlings in the field and they worked really well—didn’t miss a beat.”

Vertical Farming Pros and Cons

PROS

  • Crops can be grown quickly and harvested reliably all year.
  • Automated control software ensures optimal humidity, water, UV light, CO2 limits and nutrients for each plant.
  • Production is unaffected by environmental factors like seasons, weather and pests.
  • Water use is 70–95 per cent less than in traditional farming.
  • No pesticides or chemical use.
  • Reduced labour costs.
  • Reduced transport costs and longer product shelf life when servicing the local market.
  • Can be established on non-arable land.
  • Eliminates agricultural runoff by recycling grey water.
  • Proven capacity for high-speed seedling production.

 CONS

  • High capital costs.
  • Energy-intensive production, although sustainable solutions are in development.
  • Currently only viable for growing lightweight crops like leafy greens. (Wheat, maize and rice are not ideal to grow vertically due to the weight of the plants’ biomasses.)
  • Distribution challenges for newcomers to the market.
  • Price points are critical to achieve return on investment.

Words: Leanne Tomkins

Reproduced from the Winter 2016 edition of Westpac’s Agribusiness publication "Produce"

The articles represent the views of the authors and not necessarily that of the Bank. You should seek independent professional advice before acting on any matters set out in the articles.

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