Controlled environment agriculture and food security

Farrelly & Mitchell presents our latest report dedicated to the area of food security, entitled, ‘Is controlled environment agriculture ready to seize the future? As the world continues to grapple with the challenge of providing enough food for a growing global population, it must also contend with the competing issue of climate change. Hope is being invested that particular innovations can complement conventional food and agriculture technologies in contributing a sustainable solution to the problem, and controlled environment agriculture is seen as genuinely promising.

The global market for hydroponics was valued at USD 26.8 billion in 2018 and is expected to grow by 9.19% p.a. until 2025

As with any relatively new technology, there is a range of obstacles to the fulfilment of that promise. For example, detractors point to the huge current consumption of energy required by vertical farming, while the more positive assert the considerable investment being made into clean energy solutions and how that can be harnessed in making this tech more environmentally viable.

Similarly, the up-front costs of controlled environment agriculture is a cause of concern, but again supporters say that the technology is in its infancy and there are copious means of reducing those costs, through innovation, policy and regulatory activities.

The investment serves as a positive indicator for controlled environment agriculture

Crops currently being heavily produced by CEA are restricted to a few, but those backing the technology are confident of a greater spread as refinement evolves. And speaking of backing, there is perhaps no greater evidence for the promise of CEA than the large volumes of investment currently being directed towards it. Maybe not such a gamble when the pressure at an executive level to counter the threats of climate change and food insecurity is considered.

Another aspect feeding demand for CEA is the now established trend for urban consumers seeking locally produced food, year-round. The technology has made that possible, enabling shorter more flexible supply chains. That change in consumer behaviour has accelerated the development of CEA and could well drive further innovation in the coming years.

Europe holds the largest market share of the indoor farming market owing to the early adoption of greenhouses and vertical farming and the presence of extensive R&D centres and venture capitalists in the region.

As well as that modern trend towards fresh, locally sourced, produce, this agtech is also presenting its credentials as a solution to long-standing issues, for example, the problem of water scarcity in the Middle East, and other similar regions. The ability to grow produce, using targeted inputs, and much less water, augurs well for its future success, and it’s no accident that much of the current investment is coming from precisely those regions.

Complementary technology to conventional agriculture

Given recent trends, and the implications of food security and climate change, the place of CEA as a solution in the global food and agribusiness toolkit seems assured, and policymakers, investors, consumers and innovators will all be both observing and actively contributing to its progress in the years ahead.

As available land for agriculture decreases, policymakers are faced with the challenge of sustainably feeding the rapidly growing world population which is projected to reach approximately 9.7 billion in 2050.

Investment into tactical technologies that can combat the threats to the quality of human life and the planet itself, assure it of its place, but much development awaits, for a greater contributory impact.

 

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