Vertical farms have failed to live up to the hype

If its success relies on heavily subsidised fossil fuels, can it really claim to be sustainable?

October 8, 2024, 10:43 AM

Vertical farms tend to produce fast-growing leafy vegetables such as lettuce, or herbs — Vertical farms tend to produce fast-growing leafy vegetables such as lettuce or herbs

If it sounds too good to be true, it probably is.

Take Plantagon, the Swedish company that raised SEK4.5 million (around $435,000) and in 2012 broke ground on its first vertical farm: a greenhouse “plant-scraper” that it hoped could integrate food production into urban settings and maximise vertical space for growing food in cities.

Less than seven years later, Plantagon went bankrupt before it was even able to complete its flagship farm in Linköping, Sweden. It wasn’t the first vertical farming company to seize on the imagination of investors, and it certainly won’t be the last.

Globally, more than $1.5 billion has been poured into the vertical farming industry by venture capitalists, and billions more has come in government funding, including in the Middle East.

US startup Plenty signed a $680 million deal with Mawarid in 2024 to set up five indoor farms, including one in Abu Dhabi, which is slated to produce more than 4.6 million pounds of strawberries by 2026. Saudi Arabia’s Public Investment Fund has also teamed up with vertical farming company Aerofarms with the aim of bringing six vertical farms to Riyadh.

You can see why the technology has been attractive to governments and investors in the Middle East and particularly in the Gulf, where 85 percent of food is imported. You can also see why vertical farming companies have been so interested in the Gulf, where heavily subsidised oil and gas makes the practice economically viable in a way that it no longer is in inflation-wracked Europe.

It was rocketing energy prices that were used by many of Europe’s high-profile vertical farming failures, including Infarm, as an excuse for their untimely demise. But while energy prices undoubtedly gave them a push, it was something else that sealed the fate of the world’s vertical farming darlings: the entire concept makes absolutely no environmental or financial sense.

Given the expense, vertical farming is catering to an exclusive, niche market

Vertical farms require enormous amounts of electricity to power their LED lighting systems. Add to that the costs of climate control, high-tech sensors and urban real estate, and you’ve got a production model that is not even remotely cost effective. It is only cost effective in countries that have huge supplies of cheap oil and gas.

If its success relies on heavily subsidised fossil fuels, can it really claim to be sustainable?

And then there are the finances.

Back in 2012 Singapore’s Sky Greens raised $19 million to construct a rotating vertical farm that it claimed would revolutionise the way the world grew food. It argued that technology could finally make redundant the scourge of intensive agriculture, which consumes 70 percent of all water used globally and almost half of all habitable land.

But the cost of producing its vegetables was approximately 10 times higher than traditional farming in neighbouring countries, so retail prices were 20 percent to 30 percent higher than conventionally farmed goods. The company remains in business, but produces a modest 1 tonne of vegetables per day, far below the scale needed to make vertical farming a mainstream agricultural solution.

Another Singapore company has seen its lovingly produced lettuce end up in the trash. The volume of leftovers at SG Veg Farms, which harvests up to 500kg of hydroponically grown greens daily, has increased by about 40 percent over the past few months as a result of cheaper imports from regional countries luring consumers away, director Eyleen Goh told Channel News Asia.

Given the expense, vertical farming is catering to an exclusive, niche market – an expensive novelty, not a solution to food security. And even within that niche market, how much lettuce do consumers really need?

Let’s be honest about what vertical farms actually produce: leafy greens and herbs, and small, fast-growing crops such as lettuce, spinach and basil. When it comes to the crops that really feed people – wheat, rice, potatoes – vertical farming hits a wall. Large-scale, calorie-dense crops require more space and energy to grow and are impractical to produce in controlled environments.

So next time you hear about vertical farming helping to solve the world’s food crisis – or see a GCC nation or venture capital firm pumping money into it – remember Plantagon’s “plantscapers” and consider two things.

First, can we really live on lettuce alone? And hasn’t this region had enough problems with elaborately designed but fundamentally failed construction projects that promise much and deliver nothing?

Orlando Crowcroft is a journalist based in London