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Vertical Farming in Urban Residential Areas

Contents

Introduction ::...........................................................................................................................3

Potential Solution ::..................................................................................................................3

Advantages of adopting Vertical Farming in Indian residential areas......................................4

Performance Parameters...........................................................................................................5

Maintenance and Upgradation:.................................................................................................6

Financials:................................................................................................................................7

Who would invest? :.................................................................................................................9

Conclusion:............................................................................................................................ 10

References:.............................................................................................................................10

Introduction ::

Research reports suggest the following picture for the year 2050:

More than 70% of population will be living in urban areas. Total population will increase by around 3 billion. About 109 hectares of new land (about 20% more land than is represented by the

country of Brazil) will be needed to grow enough food to feed them.

This will lead to depletion of resources at a rate faster than that at which they can be produced. In particular, a significant portion of fertile soil will be lost due to erosion, desertification.

This problem will result in a severe food crisis across the globe.

Potential Solution ::

This calls for developing a more effective method of agriculture which can use less space and resources than the traditional agriculture i.e. creating fundamental differentiation through Value Innovation.

A possible solution has been suggested by Professor of Columbia, Dickson Despommier, in the form of Vertical Farming.

Advantages of adopting Vertical Farming in Indian residential areas ::

• Optimum Space utilization-There will be Year round crop production as it is known

that 1 acre indoor land is equivalent to 4-6 acres of outdoor land which also depends

on the kind of crop grown, thus in times when the Indian population is growing at a

fast pace and there is dearth of land, optimum space utilization can be achieved using

vertical farming.

• Efficient source of food supply- weather related crop failure will not occur in vertical

farming, besides no untreated animal waste will be there to transfer disease, Thus

there is less chance of genetically modified strains entering the plant. As the food will

be grown organically, no herbicides, pesticides, or fertilizers will be used and it would

eliminate agricultural runoff.

• Unaffected Water Supply to households: Vertical farming near societies would not

affect the regular water supply. Besides nearly 85% of water utilization could be

reduced in case of vertical farming as compared to the traditional farming methods.

Water systems engineered for vertical farming are very efficient, pipes feed plants on

all of the levels of the farm, controlling the amount of water that's disbursed for

maximum effects and then the water enters a complex systems of drains and returns

so that it can be recycled and reused again.

• Reduction in costs incurred in transportation and Supply Chain-Since the organic food

is grown in the societies, the transportation costs of the crops from the farmers land to

retailers can be avoided and thus minimizing the supply chain cost by reducing the

cost of holding and distribution.

• Creation of new urban employment opportunities – This would enhance the prospect

of employment in urban areas not just for the semi skilled workers as these workers

usually have a previous background of farming.

Improved sustainability for urban centers – Many abandoned urban areas can also be

used for vertical farming as it does not require any particular land suitability

conditions. Besides growing food in glass high-rises could drastically reduce fossil-

fuel emissions and recycle city wastewater that as of now pollutes waterways since it

helps in converting black water to drinking water.

Performance Parameters ::

Enhanced knowledge sharing and networking among organizers of vertical farming.

• Number of new innovative technologies being used.

• Diversity of knowledge sources and existing knowledge about technologies

used in Vertical farming.

Improved environment and increased resource mobilization to support innovative

technology.

• Appropriate laws and regulations to use the technology.

• Growth of public, private and donor investments for agricultural R&D and

investment.

Improved information, communication and infrastructure.

• Informed knowledge on market prices and technologies.

• Decreased physical distance across the supply chain as well as for the end

user.

Enhanced capacity at per capita or organizational level.

• Improvement in agricultural produce in volumes or per capita when compared

to existing agricultural ways.

• Time and Space used for unit production of agricultural crops.

Enhanced market opportunities and development in the value chain and supply chain.

• Growth of value added and profit margins in the chain.

• Growth in productivity and services creation.

Enhanced natural resources and eco system performance.

• Improved management of soil fertility, water and energy.

• Conservation and enhancement of agro diversity.

Maintenance and Upgradation::

Initially, the project will be started off as a prototype model.

Once the prototype model is up and running for about 5 years, this can be

implemented in large scale.

In the beginning, financing will be done by the private giants like Tatas and Birlas

as the initial start up cost is very high.

With the advancements in the technology, it is expected that the cost will come

down drastically.

Eventually, the vertical farm will have automated feeders, monitoring devices and

harvesting equipment

As Despommier described "Each floor will have its own watering and nutrient

monitoring systems. There will be sensors for every single plant that tracks how

much and what kinds of nutrients the plant has absorbed. You'll even have

systems to monitor plant diseases by employing DNA chip technologies that

detect the presence of plant pathogens by simply sampling the air and using

snippets from various viral and bacterial infections.”

Once the costs are brought down and the profit potential is realized, many

entrepreneurs will look into this as an opportunity

Farms of various dimensions and crop yields can be built into a variety of urban

settings - from schools, restaurants and hospitals to the upper floor of apartment

complexes

Financials:

Cost Structure

Start Up costs

Since the farm will be superstructure with sufficient structural capacity to hold crops, water,

soil (in the non-hydroponic proposals) humans and machines, the initial costs will be high.

Start up cost is estimated at INR 30 crore per acre

Operational costs

Energy Usage- High

Lighting - 10-40 watt per square meter

Heating and Powering- INR 3600000 per land acre

Labor costs – Medium- High

Skilled labor – to run the machines and maintenance

Unskilled labor – for agriculture

Urban wages – Since these farms will mostly be in Urban areas, the

wages may be on a higher side

Transportation costs

The concept of food miles is based on the assumption that the transportation costs to the

market will be significantly lower due to the location of the farms

Cost vs Revenue Model of a Prototype

Total Costs

Consider a 30 storied high building having a total land area of 1 acre in downtown Mumbai.

The costs associated with such a structure will be as follows:

Start up cost = INR 300000000 (Rs 30 crore)

Start up cost amortized over 30 years= 10000000 (Rs 1 crore)

Energy cost @ INR 2.5 / KWh = INR 3600000 (Rs 36 lakh)

Labor cost @ INR 150 / day - 2 persons per floor per year= INR 3200000

(Rs 32 lakh)

Material cost = INR 1000000 (Rs 10 lakh)

Total Annual Costs = INR 17800000

Revenue

Studies show that a 30-story building with a base of a building block (1 acre) would yield a

yearly crop analogous to that of 480 acres of traditional farming.

Annual Revenue from Corn farming on 1 acre of traditional farming = INR

45000

Annual Revenue from 480 acres of Corn farming = INR 21600000

This shows that a Vertical farm can actually be profitable moderately in its current structure

and the profits can sufficiently increase if we bring into practice, certain cost saving

measures.

Ways to increase Profitability

New techniques in agriculture

Dwarf crops – GM Crops which are smaller in size with the same yield

High yield crops – Growing high yield crops

Using Stacker plant holders

Niche Crops: Growing spices, vegetables, ornamental plants alongside the staple

crops

All season farming – increases the productivity 4-6 times

Savings in spoilage, pesticides, herbicides etc

Harvesting the methane gas for energy using the farm waste

Using extensive non conventional sources of energy. As we see that the major chunk

of the Operational costs come from the consumption of energy, therefore the costs can

be brought down drastically if we manage to bring down the energy consumption and

will also help in improving the carbon footprints.

Who would invest? :

Given that the initial setup cost is high, the big question is who would invest? Three options

have been considered.

1. Retail giants & Corporate houses:

One of the options is the investment of private players. Retail giant such as Reliance,

Future group, Aditya Birla group might be interested in Vertical farming to source

their greens. Though the cost is high, vertical farming brings with itself a lot of

advantages such as high yield, supply chain efficiency, reduction in the transportation

cost, optimum space utilization that the benefit overrides the cost.

Role of infrastructure companies and property developers might also be massive.

Vertical farming has the great advantage of optimum space utilization that it can be

set up anywhere. One of the options is for the infrastructure companies to set up

vertical farming blocks in townships and societies. This would be an efficient way of

sourcing the needs of the residents.

Partnership between private players is one of the viable options. If infrastructure

companies can set up the building and the required infrastructure and the retail giants

can own and buy the produce. This kind of a set up is already happening in the United

State of America. Bright Farms, a supermarket chain, together with a firm called

Better Food Solutions, a hydroponics firm, are constructing rooftop glasshouse at the

grocery stores. The supermarket agrees to buy the produce and owns the farm, while

Better Food Solutions builds it and operates it. The first fruit and vegetables are

expected to go on sale in early 2011.

2. Government of India:

To curd the severe food shortage, Government of India has to come up with

innovative solutions and Vertical farming might be one of the options. This

technology is nascent and there are no prototypes in India. However, with relentless

urbanization and diminishing agricultural land would leave the government with no

option but to adopt innovative solutions such as Vertical farming.

3. Private – Public Partnership:

Private – Public partnership is one of the viable options. Such partnership has been

adopted by the Singapore Government. The Agri-food & Veterinary Authority had

entered into a partnership with DJ Engineering, a private company. A prototype has

been developed and National Development Minister Mah Bow Tan is hopeful that this

will enhance Singapore’s supply of leafy vegetables.

Conclusion:

Relentless urbanization, drastic increase in the rate of growth of population and low yield

being the current scenario, severe food shortage is going to be the major problem that India is

going to face. Innovation and proactive measures are required to counter such calamity and

Vertical farming might just be the answer to such problems. Vertical farming promises to

eliminate external natural processes as the crops are grown in a controlled environment.

Though the initial set up cost is high, the advantages such as high yield, supply chain

efficiency, reduction in the transportation cost, optimum space utilization, year-round crop

production would overrides the cost.

Thus, Vertical farming, if successfully implemented, offers the promise of urban renewal,

sustainable production of a safe and varied food supply and the eventual repair of ecosystems

that have been sacrificed for horizontal farming.

References:

http://news.xin.msn.com/en/singapore/article.aspx?cp-documentid=4608028

http://12.000.scripts.mit.edu/mission2014/solutions/urban-agriculture

http://www.brightfarmsystems.com/

http://www.eoearth.org/article/Vertical_farming

http://mix.msfc.nasa.gov/abstracts.php?p=2889.

http://www.scientificamerican.com/article.cfm?id=the-rise-of-vertical-farms

http://www.verticalfarm.com/