The green revolution in controlled-environment agriculture

"Nectar Farms and Sundrop Farms are blazing a trail"

Vertical farms are popping up left, right, and center. Shipping containers full of purple lights and heads of lettuce dot the North American landscape, while in Asia, so-called 'plant factories' (indoor cultivation facilities) show no sign of letting up. Meanwhile, in Australia, they're taking controlled-environment agriculture in a slightly different direction. We spoke to John Mathews, Professor in Management at Macquarie University, about this.

In his book, Global Green Shift, John draws attention to the links between vertical farming, controlled environment agriculture, building-integrated agriculture and simple urban farming. The basic idea is that a new IT-enhanced platform is emerging based on food production in urban, controlled environments, which is quite different from conventional farming - while still using established varieties, so despite the high tech factor, there's no need to resort to genetic modification.

While most of the discussion on these emerging “plant factories” (to use the term employed in Japan, Taiwan and China) is focused on technology, the real issue is market access, John says. "Some of the VF initiatives in the US and Canada have gone bankrupt because their costs were too high (paying inner city rents for premium locations) while their market was not guaranteed." John points out two Australian examples where market access has been made fundamental to their design.

One of them, Sundrop Farms, has a 10-year offtake agreement with the national grocery supermarket chain Coles to take all the tomatoes produced. "This was crucial to gaining finance for the venture, and to ensuring its viability over its first decade of full commercial operation (since 2016)", John says. "Likewise Nectar Farms has an offtake agreement with the national food wholesaler Costa, which supplies supermarkets and other outlets, and also exports to the Asia-Pacific region.

"These offtake agreements guarantee a market for the produce of these green initiatives – the element that has been missing in many of the recent initiatives some of which have gone bankrupt."

Vertical farming... without the verticality
Vertical farming is a generic term used to capture aspects of the new wave of horticultural innovations. Both Sundrop Farms and Nectar Farms embody all these features – and yet both are single-storey operations that cannot be described as “vertical farming”.

John sees these operations as examples of a new green revolution that imports to the ag sector the IT-enhanced innovations that we associate with platforms. "I call them instances of controlled environment food production platforms. The lead countries are Japan, Taiwan and China – although it must be conceded that in Taiwan the examples are still very small in scale. (In 2018 Taiwan has a reported 120 plant factories producing 2,500 tonnes of fresh veges each year. That has to be compared with the output from Sundrop Farms of 15,000 tonnes fresh tomatoes each year – six times the output of the entire Taiwan industry.)"

Green tigers
John believes Asia will lead in this new urban-based high-tech ag revolution, "because that is where the new population will be added – in the cities of China, India and elsewhere. The old agricultural model that was introduced 10,000-12,000 years ago and was industrialized by the 'green revolution' is now proving to be completely unsustainable, given the fact that it is completely dependent on fossil fuels both to run the mechanization and to provide feedstock for fertilizers, herbicides and pesticides."

China is tackling all aspects of green industrialization, because this is the only form of industrialization that will scale and give the country the energy security (through renewable, products of manufacturing) and resource security (through the circular economy) that it needs. The latest wave of this modernization and industrialization of China is fresh food production in cities.

So, should other vegetable-producing countries get nervous? Well, no. "I don’t see China becoming a major vegetable exporter", John says. "It will be focused on establishing huge numbers of CEA food production systems close to cities to supply fresh produce locally and at a scale that can meet the needs of a burgeoning urban population. Exports will be a minor consideration."

Schumpeterian Surge
This doesn't mean the traditional greenhouse vegetable-producing countries can rest on their laurels though. "The big greenhouses in Canada and the Netherlands and elsewhere are products of fossil fuels. They use fossil fuels for heating, for mechanization, for transport and logistics."

There's still time for them to join the green revolution though, as John analyzes: "They can be made sustainable by harnessing renewable energy as power source and controlling water circulation (supplemented as in Sundrop Farms by desalination, again using renewable power). If new ventures emerge utilizing these technologies, such as PlantLab in the Netherlands, then the new wave will propagate via Schumpeterian competition."

This Schumpeterian Surge (named for Joseph Schumpeter, whose concept of creative destruction is all about sudden changes in economic dynamics following revolutionary innovations), as John calls it, involves propagation of a new IT-enhanced food production platform. He says it will provide the fresh veges needed by expanding urban populations throughout Asia and eventually Africa, Latin America and the rest of the world.

"The platforms will then diversify to production of fruits, berries, nuts, funghi and other plants, and then perhaps aquaponics. The final frontier will be broad-acre crops like wheat, rice, soy beans etc – a huge issue that needs to be tackled by the combined resources of the Gates Foundation, the Clinton Foundation et al."

So in short, no less than a green revolution. A bold vision indeed, but as John says: "What is the alternative? More fossil-fuelled farming that is destroying the earth? Look closely at Nectar Farms and Sundrop Farms – they are blazing a trail for others to follow." Whether you agree with John's words or not, the idea of a green revolution is certainly interesting.

Publication date:

Receive the daily newsletter in your email for free | Click here

Other news in this sector:

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber