The advantages of vertical farming over traditional agriculture are clear. Yet barriers are holding back the industry – huge capital outlays, high energy costs through artificial lighting and a premium price until there are enough global players with economies of scale.
At Infarm, Erez Galonska says input from governments and other institutions in the form of incentives and grants is essential to spur progress.
“Even when you look at COP27 and beyond, we are already speaking with policymakers, NGOs, with different kinds of organizations, to help us galvanize people to start and think about what we eat, what the supply chain is going to look like in the future, where food is going to be produced, the insecurity of food, what we can do and what we can’t do – the role of grants, subsidies, and regulatory issues,” he tells Just Food. “We see there is a joint effort here to overcome the mega challenges that we’re facing.”
Financial stresses
Access to investment is just one of the challenges to support the capital-intensive nature of urban farming and the initial set up and running costs. However, artificial intelligence-powered machine learning and cloud-based data-collecting systems, both employed by Infarm, improve efficiencies and help bring costs down. And they reduce labor to work the farms.
Indicative of the financial stresses, France’s Agricool, founded in 2015 two years after Infarm, went into receivership this year. “The declaration of cessation of payments was motivated by an insufficient turnover to finance the high structural costs characteristic of start-ups, mainly linked to the costs generated by investments in R&D and the lack of volumes necessary to achieve an operating balance,” court documents read.
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