To feed its growing population, the MENA needs a resilient food supply that isn’t so vulnerable to climate change and other extremes. It needs to produce higher yields, on less land, with fewer inputs.
Cue vertical farming: a type of controlled environment agriculture (CEA) that grows crops in vertically stacked layers.
However, once hailed as a high-tech solution to solve food security, the industry has battled various challenges in recent years. And with several industry leaders bowing out, questions remain about whether the bubble has burst.
So, is it all hype? And what part does it have to play in the future of food?
By the time the population reaches nearly ten billion in 2050, farmers will be required to double food production. However, after years of agricultural expansion, a significant portion of the world’s arable land has been lost, and projections are that due to climate change and population growth, it will only decline further.
This is where vertical farming comes in. Compared to traditional methods, vertical farming can produce 240 times greater yield on 99% less land. It can also reduce food miles, meaning produce can be consumed at peak freshness, and without pesticides or herbicides.
Speaking about vertical farming’s applications in the MENA, Professor Paul Gauthier, one of the world’s leading experts in vertical farming and protected cropping, said considering the region’s weather conditions, and reliance on food imports, it’s “a great option.”
“Plus, we have seen with the Arab Spring and the Syrian war what food prices can do to political stability in the region. So having a way to mitigate food prices is critical,” he noted.
“Making it sustainable is critical, however,” he added. “The MENA region has a lot of sunshine and many countries have large lands available, so powering vertical farming should not be an issue, but more improvement remains to be done on more efficient energy sources and more efficient production systems.”
There’s been a lot of hype about vertical farming as the future of food. But recently, it’s fallen from great heights, having faced various macroeconomic challenges. Skyrocketing energy prices have been a particular hurdle, leading to investors switching off the lights and firms shutting up shop altogether.
And indeed, there is no escaping the fact that vertical farming facilities have exorbitant startup and operational costs. But profits? They remain elusive. With investors questioning the prospects for profitability, investment globally has slumped.
Infarms, once Europe’s largest vertical farming company, has left the continent, citing, in part, soaring power costs. AeroFarms, another high-profile player, filed for bankruptcy in June. AppHarvest, meanwhile, has faced lawsuits alleging it misled investors. Like AeroFarms, it too filed for Chapter 11 bankruptcy. Pennsylvania-based Fifth Season and Netherlands-based Glowfarms, meanwhile, shut down in 2022.
Reflecting on how the situation has played out, Gauthier said that vertical farming has been “significantly” impacted by the energy crisis, because those in the industry are squeezed between input costs and “the price retailers pay for the products to limit consumer impacts.”
He also noted vertical farming companies “missed the train” of being recognised as farming companies. “They never benefitted from subsidies necessary in times of crisis.” This, Gauthier said, is also a government decision. “What would have happened in 2008, if the government had not heavily invested in saving the banking sector? Farming is in the same situation but governments are ignoring it.”
Gauthier also explained that countries’ food production capabilities have determined the extent to which vertical farming has been affected; in places facing difficult weather conditions, and labour, farmer and land shortages, vertical farming appears to be weathering the storm.
Following this logic, alongside lower energy prices, the Middle East looks like an attractive destination that could offer the industry a new lease of life. Indeed, as companies quit Europe, many have alluded to or begun expansion into the region. This is true for AeroFarms, which has already received investment from PIF in Saudi Arabia and DVC in Qatar. Back in February, with support from the Abu Dhabi Investment Office (ADIO), it also opened the world’s largest R&D vertical farm.
Indeed, despite strong headwinds in North America, co-founder Marc Oshima told ESG Mena in July that the company remains present in the MENA: “While we are evaluating strategically all of our business, AeroFarms continues to be active in the MENA region, and we continue to work with our partners PIF, DVC, and ADIO. “
Gauthier said he’s often asked why there have been so many closures in the industry as of late. His answer? Many vertical farms were designed as technology companies first and foremost and were or are not run by farmers. Of course, while this may have helped attract initial investment, he suggests that this was misguided.
“Many of the successful vertical farm companies today have people with an Ag background leading them. Vertical farming is about farming!”
According to Gauthier, in the beginning, there was a technology gap that pioneers filled. However, as companies grew, some failed to transition to farming. “This has resulted in overly complex systems (requiring too much energy because, yes, automation is energy) and focusing on the wrong R&D.”
Gauthier noted academia was also slow to develop research to support the industry. While research centres are now emerging, he said they are yet to have a real impact, due to “a lack of transparency” within the industry regarding what it really needs. “I hope that I can change that by creating an industry consortium that will support the industry and help vertical farmers to grow together.”
So, what does the future hold for vertical farming? Can it feed the world or at least the MENA region? It’s a big question, and opinions are divided.
Right now, vertical farming is largely serving up leafy greens. These low-value crops with little nutritional value aren’t just bad for attracting investment, they don’t solve food insecurity.
When asked about whether it is capable of producing more than just lettuce, Gauthier said, in theory, there’s nothing a vertical farm cannot grow. “The question is always about can we do it profitably?” he said.
“A recent paper published by a team of experts led by myself has demonstrated that we could grow wheat in a vertical farm at scale and get 600 times the yield that the same amount of ground area would normally produce,” he added.
The energy required for running such a facility, however, would be massive,Gauthier said. “Nevertheless, if we consider the amount of money that Governments usually pay to subsidise farming and if we research on optimising energy generation for the farm, I believe staple crops may be possible as a complementary production or to de-risk the period of crisis.”
But, of course, we’re currently at a fork in the road, and ‘theory’ must become practice.
It’s important to note, though, that vertical farming proponents, like Gauthier, aren’t saying vertical farming is a silver-bullet solution – because there isn’t one.
“There is no way however for vertical farming to replace traditional farming. Vertical farming is an addition to traditional farming and the world needs traditional farming to thrive if we want to achieve the FAO [food production] goal. In fact, because vertical farming is predictable and consistent, it is a good solution to de-risk our food production system for decades to come,” he said.
Indeed, if the industry can unlock ways to improve energy efficiency and embrace relocation to more fertile ground like the Middle East, vertical farming might just rise once more.
By Madaline Dunn, Lead Journalist, ESG Mena