By Project Coordinator of the Global Opportunity Network Emil Kofoed Braunschweig
In a world with increasing urbanisation and a population that is expected to increase to 8.4 billion by mid-2030, a global food crisis is a very real risk. Furthermore, an increase in the global food production could challenge Earth’s already strained ecosystems. The good news is that the more than 5,500 leaders surveyed worldwide for this year’s Global Opportunity Report sees great new market potential in addressing the risk of the global food crisis. In particular, the opportunity for ‘smart farming’ offers the potential to feed the world, while protecting the environment.
Part of the smart farming opportunity space is solutions which move food production from rural to urban areas, close to the points of consumption. But the main constraint for urban farming is space which is why we’re seeing increased innovation in vertical farming.
There are many illustrative examples out there as to how these farms of the future could look like, such as the The Dragonfly Tower.
Those looking for a readily available example of an up-and-running vertical farm is Sky Greens in Singapore, which has existed for five years and is a supplier to the largest supermarket chain in Singapore. They grow leafy greens on an A-frame that stands nine meters tall.
We had a talk with the team behind Sky Green to gain more insight on the urban farming opportunity they are acting on.
Roshe Wong, business development manager at Sky Greens, told us about how they have overcome the challenges in the smart farming opportunity space and on what the future of urban vertical farming looks like to him.
Global Opportunity Network (GON): Why Sky Greens?
Roshe Wong (RW): As the world continues to urbanize, sustainable development challenges will be increasingly concentrated in cities. By 2050, the World Health Organization estimates there will be nine billion people on the planet, with 70 percent of them residing in urban areas. Studies show that this population will need 60 percent more food than what we can produce today. Even in China where land is vast, official figures in 2014 have indicated that more than 40 percent of arable land in China has already been degraded. Agriculture uses 70 percent of global freshwater – another finite resource that could not be scaled with growth.
However, this clear and present danger precisely offers great opportunities for us. Vertical farming solutions can address challenges of relentless urbanisation such as encroachment of arable farmlands as well as problems associated with traditional farming e.g. high carbon and water footprint, environmental damage due to run-offs, and so on.#
GON: You have now been running the farm for five years, how do you evaluate your progress?
RW: We actually started the commercial farm operation in 2012 and it has been viable with consistent supply to our anchor customer, Fairprice, the largest supermarket retail chain in Singapore. As we are not farmers by training, we have to undergo a learning curve on farming know-how, particularly in cultivation, soil treatment and pest management. Today we have our own plant scientist and operations team besides our core engineering solutions team. We also build our farm in phases in order to make continual improvements on our designs based on our own experience. By end of this year, we aim to complete the construction of the entire farm with 2000 towers in operation (currently about 1300 towers have been built for commercial production and R&D).”
GON: A main issue for many urban farming solutions is the economics, how does Sky Greens overcome this challenge in terms of the business plan and technology?
RW: The essence of our design is to keep running or operating costs low, and our current solutions are able to keep that lower than traditional farmers. Nonetheless, the capital expenditure may be beyond the investment capacity of farmers. However, this could be resolved by appropriate bank financing as such solutions qualify as fixed assets (plant, machinery and equipment). Our own towers in our vertical farm facility in Singapore are financed in the form of hire purchase loans. Farmers can now earn a higher income due to the significant productivity improvement which could in turn afford the loan repayments. Farmers’ books can now be capitalised with tangible assets with good economic lifespan, debunking the “poor farmers” moniker.
In urban farming context, the key challenge is not so much of economics but scaling issues, available land/space for conversion to agricultural use and governmental regulations/specifications on urban land use.
While community gardens within residential spaces have been established with residents growing and tending some vegetables for food, these are not adequate for consumption even on the community level because agricultural production requires scale and efficiency. In Hong Kong and some cities in China, rooftop farming has emerged sporadically but commercial models would probably experience the same limitations as Singapore such as scalability, necessity to deal with a cluster of different landlords, logistics challenges, security access, loading limits, GFA restrictions, etc.
Another application is to install vertical farming system on building facades with the dual benefit of greening architectures and lowering the indoor temperatures. Instead of pure landscaping that serve aesthetic purpose, these vertical areas could now be used economically for food production within urban spaces.
GON: The initial investment in the establishment of the farm is quite high compared to conventional farming. What was the initial investment and when will you see a return on that investment?
RW: Our farm facility upon completion will cost a total of SGD 26 million. However, this includes non-production assets such as engineering block, administrative and R&D facilities that are not production-related. Based on our commercial operation, Singapore costs and selling prices, our payback period is five years.
GON: In addition to that, I see there are plans to export the solution to other countries? Can it be applied worldwide?
RW: We have already built a 192-tower facility in Hainan, China and a 16-tower facility in Thailand for our client and partner. The Hainan project was completed in June 2015 while the one in Thailand was completed in December 2015. We are currently in advanced negotiations to establish vertical farms in various parts of China and Malaysia while we received numerous enquiries from various parties all over the world.
GON: You only grow leafy vegetables, why not other types?
RW: We grow mainly Asian leafy varieties such as Nai Bai, Cai Xin, Xiao Bai Cai, Mao Bai, Japanese Mizuna, Purple Cai Xin and Kale for commercial production. However, we had grown herbs, sprouts, small fruited vegetables, strawberries and even padi in the past successfully on a trial basis.
GON: For many urban farms it is an issue to make it as cheap as conventional vegetables and your vegetables cost more in the supermarket than vegetables grown in conventional farms, is that a challenge and how do you address it?
RW: Our systems are viable for commercial production of mass market vegetables and the produce we grow and sold in Fairprice supermarkets are priced competitively against imports and local traditional farmers.