Vertical farming: Techno-optimism meets harsh realities

In a clash of idealism and reality, the allure of vertical farming meets its harsh truths. Techno-optimists champion its space efficiency and climate resilience, yet economic woes signal a faltering future. The bubble bursts, leaving startups reeling. But the problem runs deeper than financial woes; the very essence of vertical farming’s promise faces scrutiny. As lettuce dominates, the industry grapples with scalability, costliness, and the daunting challenge of competing with traditional agriculture.

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By Ivo Vegter*

Bright green techno-optimists love the idea of vertical farming, but vertical farms are failing.

There are many kinds of environmentalists. Most have a fairly poor grasp of economics, treating productivity and resource use as if it were a zero-sum game.

They often end up opposing economic growth, opposing industrialisation and opposing free market capitalism, thinking that the root of environmental degradation is a simple matter of the over-use of natural resources.

Some turn alarmingly misanthropic, believing that only a smaller human population can save the planet, telling people not to have children, and telling children their parents destroyed the planet and that they’re doomed to die young as a result.

I prefer strains of environmentalism that recognise the legitimacy of human economic development, and that apply market-based economic thinking to the conservation of nature. Call it free-market environmentalism.

A closely related brand of eco-thought describes itself as bright green. In contrast to the pessimism, misanthropy and anti-capitalism of ‘dark green’ environmentalism, it posits instead the more optimistic view that prosperity and technological progress can achieve environmental sustainability.

I love the techno-optimism of such people, and their idealism. In principle, I agree with the view that the solution to our environmental problems can only be solved by human ingenuity and economic progress.

We cannot have a sustainable environment without human prosperity, and vice versa. Any ideologies that reject this principle are either doomed to failure, or are misanthropic and immoral.

Practically useless

The problem with techno-optimism, however, is that while it may in general be a valid position – after all, the entire history of economic progress is one of technological progress – this does not mean that any specific technology is a good idea.

Many technologies that look attractive to environmental idealists are, in fact, practically useless.

One such technology is vertical, indoor farming.

On paper, it looks amazing. It uses very little land. Growing conditions can be minutely controlled. Sunlight can be reliably simulated using LED lights. It uses very little water because it loses almost no water to evaporation. Plant nutrients can be precisely managed. It can provide physical barriers to pests, instead of relying upon insecticides. It can produce crops year-round, and at far higher yields than traditional farms. They can be built in urban areas, close to markets, reducing the need for polluting transport.

According to a recent article in Farmers Magazine, a South African online publication, the advantages include space efficiency, resource conservation, climate resilience, reduced environmental impact, freshness and quality.

According to its boosters, indoor vertical farming is ‘reshaping the food and beverage industry’ in South Africa. It empowers communities through ‘green growth, job creation, and reduced carbon footprint’.

It can ‘aid in enhancing food security, establishing sustainable livelihoods, and addressing the environmental issues that African farmers face by making the most of available space, preserving water, and boosting crop yields’.

It has many benefits, they say, ‘such as contributing to sustainability and food security. South Africa also has good farming conditions to accommodate vertical farming.’

It is ‘a beneficial technique, especially in areas such as South Africa’, where ‘the land for agriculture is very limited, so vertical farming is becoming very popular’.

Bubble burst

There’s just one problem. Globally, capital has stopped flowing into vertical farming companies. The bubble burst in 2023.

Bowery Farming, one of the first unicorns in the sector (a unicorn being a startup with a $1 billion valuation), has reportedly ‘conducted multiple rounds of layoffs and has slowed its growth mode as its valuation plummets, making it the latest unicorn to show financial stress as funding for the sector dries up.’

And it’s not the only one. Many vertical farming companies have laid off staff or gone bankrupt.

Industry boosters call this the ‘bleeding edge’, and say they aren’t particularly alarmed by the churn, but it all has a bit of a stiff upper lip feel about it.

Lettuce

Many problems bedevil the idea of vertical farming. Let’s start with the most obvious. Go look up images of vertical farming. I’ll wait. Back?

Did you notice how much lettuce there was? So much lettuce! There’s a little spinach and some leafy green herbs, and somewhere down the page you get some tomatoes, but that’s it.

No grains or cereals. No vegetables or fruits (other than tomatoes, peppers, strawberries and cucumbers).

Just things that are dead easy to grow and don’t require much by way of fancy picking or processing.

Yet cereals, coarse grains and oil crops make up over 80% of all cropland. Vegetables, of which vertical farming produces only a small number, account for only 3.3% of land under crops.

For indoor, vertical farms to make significant inroads into agriculture at all will not take years. It will take decades of technology development.

Expensive

There are other problems, too. Farm labourers are paid very little. Workers in vertical farms are more like lab assistants. They need to operate robots and computer systems, and work with highly automated systems. Such labour is expensive.

So are the systems themselves. High-tech industrial automation doesn’t come cheap. It is costly to acquire, and costly to maintain.

And so are the consumables. Electricity in particular, is not cheap, and you need a lot of electricity, powering a lot of LED lights, to simulate sunlight. (In South Africa, of course, needing electricity is ipso facto a major obstacle to commercialisation.)

Economies of scale

Globally, crops grown in vertical farms are roughly five times more expensive than the equivalent grown on a regular old outdoor farm. Those aren’t the sort of food prices that Africa can afford.

The systems and supply chain logistics of the traditional farming industry are highly efficient, and operate at economies of scale that vertical farms can only dream of.

Competing against that is not simply a problem of setting some robots to work under grow lights.

Vertical farming is a clever idea, and will make a wonderful niche industry, catering to the wealthy urban hipster market.

The chances of such farms ever becoming efficient enough to meet grand promises such as ‘enhancing food security, establishing sustainable livelihoods, and addressing the environmental issues that African farmers face’, are slim to zero.

Unless… with all that lettuce, perhaps there’s a golden opportunity to farm rabbits. Rabbits for Africa would make a nice slogan. Add some downstream beneficiation to make rabbit biltong, rabbit fur gloves, rabbit-leather wallets and lucky rabbit’s feet, and you’ve got a killer business model for South Africa!

Or maybe not.