What are the challenges to running a successful indoor farm?

Events Exclusives from Urban Ag News

(I had the opportunity to host the Great Lakes Ag-Tech Summit in Cleveland on Sept. 23, 2019.)

The amount of investments made in the vertical farming and controlled environment agriculture industries has been well documented. Those companies that successfully raise capital are seen as industry heroes and it’s quickly assumed that they must have all the answers. But, the big question is…do they?

In order to answer that question, it is important to be specific about the questions we are asking, the assumptions we are making and to understand that the answers will come from a wide variety of different perspectives.  

List of questions

Examples of questions I am receiving and ones that we might want to ask include:

  • Can a farm using controlled environment agriculture techniques be profitable?
  • What crops have proven to be profitable in a greenhouse?
  • What crops have proven to be profitable in a warehouse?
  • What crops have proven to be profitable in a shipping container?
  • What segment of the produce industry are these farms capable of serving?
  • What defines a vertical farm?
  • What is the difference between a greenhouse and an indoor ag facility?
  • What makes controlled environment agriculture techniques and innovations unique?
  • Does geographic location play a role in designing a controlled environment agriculture facility?
  • Why invest in controlled environment agriculture?
  • What problems are we solving?
  • Is controlled environment agriculture environmentally sustainable?

The answers to all these questions are extremely important. The answers provide important insight on whether there are existing examples of multiple successful projects in a given region for a given set of crops to be produced in a controlled environment agriculture facility.

An example of how this plays out can be seen when looking at the greenhouse-grown vegetable industry. There are a number of Dutch greenhouse experts for those climates and crops that companies have proven successful over the past decades. But this does not mean that their expertise necessarily transfers to every situation. Any time ag technology and “experience” are taken to a new climate and introduced to a new market and crop there will be problems, mistakes and failures. This has been proven time and time again.

Successful business models

It is also important to realize that it is highly likely that there are many different business models that can be successful as we look at innovation to solve growing problems within horticulture and agriculture. This can easily be seen in existing greenhouse industries.

For those of us close to the industry, we can acknowledge the fact that there are low-, medium- and high-tech greenhouse facilities that are capable of producing good quality crops consistently and profitably. The reason for this is that depending on where the greenhouse is built and the crops that are grown, the greenhouse and the technology within it are designed to serve different purposes based on labor and access to natural resources. It is likely that as the indoor ag industry matures, we will find similar models.

Hurdles to overcome

So, what are the hurdles the indoor ag industry needs to overcome in order to be successful? And how are we as an industry going to achieve this success?

Based on my conversations with many industry leaders, these are the top 11 topics we need to address:

1. LaborIncrease cost and lack of availability
2. Natural resourcesIncrease cost and lack of reliability
3. Capital intensive technologyClimate management (HVAC, lighting, CO2)
4. Access to capitalLimited funding sources
5. Access to dataNeeded to make better decisions
6. Profitability/yieldYields/m2/$ drive profit
7. Education/knowledgeLack of experience = poor decisions
8 Environmental sustainabilityEfficient resources are no longer an option
9. Crop typesNew environments = new crop types
10. Better cultivation systemsAutomation: labor and data: control
11. Realistic business modelsNew industries must grow up and mature

Finally, how are we as an industry going to provide solutions to these challenges or other larger problems?

First, we need to agree on which challenges we should address first and which ones we have the best chance of overcoming. Second, we need to be self critical. We need to determine if these challenges are caused by problems we created and determine if they really need to be solved?

We then need to learn from other industries that have come before us. This means we need some level of open collaboration. We will need some form of standardization. We will need to focus on education. And finally, we will need some luck.

“Alone we can do so little, together we can do so much.” – Helen Keller

If you are interested in taking this conversation to the next level, I encourage you to join me on social media, at one of the many upcoming events I will be participating in or through collaboration.

Written by Chris Higgins – Urban Ag News and Hort Americas.

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