Extreme weather and increased pests and diseases are undermining farming yields around the world

VERTICAL farming was once so sexy that it tempted the likes of Natalie Portman, Lewis Hamilton and Justin Timberlake to join venture capital (VC) and private equity firms buying into hightech facilities cultivating crops in stacked layers using soil-free growing techniques. Those investments have turned ugly recently — but there are still reasons for optimism about the future of high-rise food.

The headlines aren’t encouraging: The Jones Food Co, which opened its biggest farm in Gloucestershire last year and had Ocado Group plc as a major shareholder, went into administration in May. Vertical Future, a London-based equipment supplier, sought protection from creditors in August, owing £7.9 million (RM44.9 million) to unsecured lenders.

That follows US-based Aerofarms and AppHarvest, which both filed for bankruptcy in 2023, and Plenty Unlimited which entered Chapter 11 proceedings in March not long after raising almost US$1 billion (RM4.23 billion) in venture funding. Celeb-backed Bowery Farming ceased operations at the end of 2024.

About US$2.2 billion of capital was raised by now-bankrupt vertical-agriculture companies. As a result, it’s been hard for the remaining firms to generate more financing. Analysis from consutancy firm EcoTech Capital found that after raising almost US$8 billion globally between 2018 and 2022, indoor-farming companies subsequently attracted less than US$1 billion by the end of 2024. But as the hype fades, concern about food security is keeping interest in vertical farming alive.

Our food sources are threatened by climate change. Extreme weather and increased pests and diseases are undermining farming yields around the world. Two weeks ago, UK newspapers reported that Downing Street officials blocked the publication of a global ecosystem assessment warning that food shortages could be just years away. Meanwhile, the Energy and Climate Intelligence Unit, a non-profit research organisation, calculates that there’s been a deficit in UK wheat production of more than seven million metric tonnes since 2020, enough to bake a year’s supply of bread. In olive oil, cocoa and coffee, we’ve seen external threats leading to price shocks.

At the same time that biodiversity loss, flooding and drought harm farming, there’s increased competition for land use such as growing bioenergy crops, rewilding and housebuilding. UBS AG analysis suggests that rising global consumption could lead to an 8% crop production shortfall by 2050 if yield growth doesn’t improve.

Vertical farms offer a solution to this problem. Fischer Farms Ltd’s Norfolk site can grow as much food on four acres (1.6ha) as can be cultivated on 1,000 flat acres, using 95% less water and no need for pesticides and herbicides. In controlled tunnels, where the lights and temperature can be tweaked to produce perfect crops, fresh salad leaves and herbs can be produced all year round, insulated from the vagaries of the weather.

Right now, Fischer Farms is focused on growing leafy greens, as they don’t require pollination and suit vertical farming well. On a visit two weeks ago, I saw tunnels of watercress, pea shoots, kale and rocket growing so uniformly they looked like bright green lawns. At their smaller research and development site, the company is perfecting methods to grow crops including tomatoes and strawberries. CEO Chris Kirke told me that the long-term plan is to expand into nurturing staples such as wheat and rice, though more progress is needed on seed genetics to introduce suitable crop heights.

There are multiple benefits from this farming method. Nearby pig farms can feed their animals with the dense mass of roots left after pea shoots are harvested, reducing waste and the need to grow fodder. Greens grown inside don’t need to washing to cleanse leaves of dirt and bacteria, doubling shelf life.

The industry has been hobbled by a mixture of the expense of building facilities, soaring energy costs and misadventures with the wrong crops. For example, growing iceberg lettuces vertically can cost more than double those grown in fields. Basil is similarly uneconomical; Kirke explained that it takes a long time to become harvestable, and growers compete with imports from Kenya which can hand-cut bunches again and again from huge plants grown outside.

Fischer Farms is focused on more specialist, high-value produce which can be competitive with outdoor-grown and imported crops. Some resurrected firms are following a similar approach; Plenty Unlimited has a new lease of life focused on strawberries, for example, while AeroFarms was restructured to cultivate microgreens, young vegetable and herb shoots harvested after the first leaves have opened.

While vertical farms can theoretically grow just about anything, anywhere — as long as there’s water and energy — location still matters. Tomatoes, for example, will become more cost effective in somewhere like the United Arab Emirates (UAE) because solar power is plentiful and cheap, Kirke explained.

With traditional agriculture suffering from aging infrastructure (and farmers), rising costs and increased regulatory burdens, vertical farming will become increasingly attractive as trial and error refines cultivation methods, and raw materials and infrastructure such as seeds and lights become cheaper and more efficient.

For the future of food security, look skyward, not to the horizon. — Bloomberg