By 2050, the world will have 2 billion more people than it does today. How to feed them without overwhelming the environment is going to be one of the toughest challenges in the coming decades.
One solution that has emerged has come to be known as indoor farming. It involves growing crops in an enclosed environment where the grower has full control of parameters such as light, water, nutrients, temperature and carbon dioxide. Food production takes advantage of techniques such as hydroponics and aeroponics.
Hydroponics is a method of growing plants in a sterile medium using nutrient-rich water. Aeroponics does away with the growing medium altogether by feeding plants with nutrient-laden mist. These methods can use up to 90% less water than traditional farming, avoid chemical runoff, and prevent over fertilisation.
Proponents say that indoor farming can produce a reliable food supply with a much lower environmental footprint as traditional farming is restricted by the availability of arable land, soil quality, water availability and weather conditions.
Indoor farming is gaining popularity worldwide. This is due in part to technological advances that have brought down costs considerably, as well as the use of sensors, data and artificial intelligence to control and improve how plants are grown and scale up operations.
Studies conducted by the German Space Agency found that in 2016 the economic gap between crops grown using hydroponics with LED lighting and crops grown conventionally in the German countryside was around US$3 per kilogramme, a 75% drop from more than $12 five years ago. The economic gap is expected to continue to narrow as technology costs decline. For example, the price of LED lights, a critical component of many indoor farms, has come down almost 80% since 2012.
In Japan the number of indoor farms (also known as "plant factories") increased threefold between 2011 and 2016 to roughly 200 sites. They are known mainly for producing green leaf lettuce, romaine lettuce, frill lettuce, spinach, basil and arugula.
More indoor farms in Japan are reporting profits or breaking even, according to a 2016 survey conducted by the Japan Greenhouse Horticulture Association. In addition, older farms are more likely to be profitable than newer ones, although this may partly be because their assets have been fully depreciated. Further declines in prices are also expected as growers gain more experience and fine-tune their production methods.
Three consumer-driven trends are also helping to drive the growth of indoor agriculture. First, food safety is a primary concern for many consumers who fear that contamination and chemical residues from pesticides are more widespread than they had been led to believe. Testing conducted by the Thailand Pesticide Alert Network in 2016 found pesticide over the maximum residue limit in 25% of products bearing "Organic Thailand" labels.
When crops are grown indoors, pesticide use is unnecessary. In China, where almost 20% of arable land is contaminated and air pollution can be as high as five times the level the World Health Organization considers safe, many indoor farms have sprung up to serve the affluent urban population who are demanding safe and clean food.
Second, demand for healthier and more nutritious food is also driving demand as indoor-grown plants can be altered to meet specific dietary needs. For example, Fujitsu has converted a semiconductor plant to produce low-potassium lettuce for Japanese consumers with kidney conditions. Manipulating growth using indoor farming techniques can potentially produce more nutritious plants. Some researchers have found that tomatoes grown using LED lighting contain more vitamin C level their conventionally grown counterparts.
Lastly, many consumers are becoming more interested in locally grown food as a way to connect with the local community, reduce the environmental impact from transport, and get fresher food.
Several forms of indoor farming such as vertical farms and container farms are designed to be located in urban areas so consumers can get access to much fresher produce that can be grown year-round. This presents a business opportunity for producers in urban markets with low food security. For example, Panasonic is currently offering 40 varieties of greens grown from its indoor plant factory in Singapore. For a country that imports more than 90% of its food, indoor farming offers a way to increase food security and build a local food supply chain.
To be sure, indoor farming is still an emerging industry. Setting up an indoor farm is an expensive undertaking with high capital costs and requires specialised technical know-how. Construction costs for the structure can vary greatly from a simple greenhouse that relies on sunlight to a multi-storey farm with densely stacked rows of crops and artificial lighting. Then there is the system cost such as trays, pumps and lighting, as well as sensors and controls.
Moreover, indoor farming requires precise application of nutrients and control of parameters such as lighting, water and temperature. This means that in addition to understanding the nutrient needs and growth requirements of different plants, growers need to possess knowledge about indoor growing systems and equipment.
For would-be producers, the first considerations when embarking on an indoor-farming venture are the economic viability of potential crops including market demand, cost to produce, and market price. In Thailand, demand for hydroponically grown plants has expanded over the years as lettuce varieties such as red oak and green oak become popular with consumers.
However, a typical commercial-scale hydroponic system cost well over a million baht for one rai of land, not including greenhouse construction. Even assuming an optimistic production yield and healthy market demand, the payback period is longer than two years. This means that without a big breakthrough in technology and cost reduction for more high-tech indoor farming, the high upfront cost and small margin for indoor-grown crops will still limit future growth of indoor farming in Thailand.
To be clear, indoor farming should be viewed as a supplement to traditional farming rather than as a replacement. Its role is to augment the food supply chain to create a localised system that is more resilient to adverse weather conditions and better prepared to meet the demands of a growing urban population.
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