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The Coming Vertical Farming Scam

OPINION: It's bound to be a bubble and a corporate takeover of the food supply, and you most likely will end up bailing out the corporate owners before it's over with.

Just as in the Gold Rush of 1849 led to the conquest of the American West, the promise of unimaginable wealth now lures modern prospectors to vertical farming: The rewards will be profit from lending (the financing industry), profits in market controls (capturing markets), and profits in the ironclad ownership of your food supply (not necessarily in raising of food per se).

This is not to say that individuals in the industry are not interested in saving the world from starvation. That may well be the case. Yet, given the system we have, the oligarchs are likely to exact a steep price on us in return for providing food security.

It might be worth remembering that whoever controls your food supply will control you and your descendants, which means that unless we change the Constitution, impersonal corporations now (by court decisions) armed with the same rights as human individuals, will most likely become the new owners and managers of everything that is. A new industry promoted by corporations and wealthy owners will exert control in everything from government, to agricultural subsidies, to health and diet education, to markets, and to food.

I keep wondering, "What could possibly go wrong with he vertical farming industry?" (Tongue in cheek) If you think the auto industry and the housing/banking industries extorted their way out of past bubbles and collapses, wait until three or four corporations own your food supply. They will be able to ask anything they want ... and to get it. From you. From the taxpayers. From Congress. From government.

Note that, although I am skeptical about the eventual outcomes, I am not (at this point) opposed to vertical farming so long as the technology is in the public domain and managed in the public interest; it must not be entrusted to for-profit corporations or left to those with proprietary rights. Other questions are whether it can be scaled small enough for local farmers to take advantage of it, and whether low-cost, startup financing will be made available so that small family farms, as opposed to giant food corporations, can enter the fray. A further issue is that big corporations do not need (and must not be given) government seed money or public financed, low interest loans, only to turn around and sock it to the public.

Importantly, I was not able to find reliable figures for $$ input costs versus $$ farm output (grower's income from output) on any of the links I saw. Articles often seem to steer away from the topic, preferring to talk about how much produce they can grow on an acre of land with this very unnatural approach to farming.

What became apparent to me from the articles is that present vertical farming is based upon proprietary technology, that the startup costs are quite high, that the technology may not yet be financially feasible, and that the seed money is coming from big corporations and for-profit entities, which means, they smell money. But whether that money is from the actual value of their crops, or from their ability to own and manipulate markets is yet to be seen.

In short, the real money is probably not in growing food; the money is in owning the patents. With special equipment, $4 million startup costs for each vertical farm, and patents on every side, I predict that corporate giants will be looking to own the food supply, much as Monsanto and similar corporations have successfully taken over 80 percent of the nation's corn seed. And the traditional farmer? Squeezed out of the market, forced to buy seed and other products from the monopolistic corporation. Government subsidies and other concessions are liable to be made to this new industry and the corporate investors. Capitalist profiteers will sniff the smell of money, lean on their Congressional Delegates for laws protecting their investments, and of course, the new industry will end up owning the oversight agencies: Expect them to protect the industry, not the general public.

Pertinent links [Words in brackets are mine]:


[Not energy-efficient or sustainable]
Studies found indoor farms that rely solely on artificial light are not energy-efficient or sustainable.

“Just because it’s possible to grow inside a warehouse doesn’t mean it’s a good idea, doesn’t mean it’s cost effective,” said Harbick. “If you do the math, the energy costs just aren’t what they should be.”

Harbick warns: "These companies struggle once their seed money runs dry."


[Displaces workers]
Japanese company Spread has recently announced that robots will carry out all but one of the tasks required to grow tens of thousands of lettuces each day in its indoor automated farm.
“My first thought was, ‘we could build a lot of greenhouses for $200 million,’” recalls Neil Mattson, a professor of plant science at Cornell and one of the country’s leading academic voices on indoor agriculture, who’s found that high-tech greenhouses that harness sunlight are more cost- and carbon-friendly than vertical farms that use artificial light. [In other words, more conventional greenhouses are better and cheaper.]

[Conventionally grown is cheaper]
Walking into any supermarket will reveal a small mountain of salad greens, carrying a price tag of between $9 and $12 per pound. They may be locally grown or organic, which will add $0.50 or $1 to the price tag. Meanwhile, a 4.5-ounce carton of Massachusetts-based FreshBox Farms’ spring mix—grown in the company’s hydroponic farm in Massachusetts—costs $3.99 for a 4-ounce box, or $15.96 per pound. Or kale: the conventional variety will run you $1.33 per pound at Walmart; organic kale costs around $4.99 per pound at Whole Foods; and vertically farmed kale grown at Newark, New Jersey-based AeroFarms will cost you a whopping $14.18 per pound.

Agritecture Consulting, whose clients include current and prospective indoor farms, estimates that a 30,000-square-foot vertical farm growing leafy greens and herbs in the tri-state area around New York City requires nearly $4 million in startup capital—not including labor.

[Following the money]
"In 2016, AeroFarms, now considered an industry leader, spent $30 million on its flagship aeroponic farm in Newark. The majority of these costs lie in the equipment needed to grow greens without soil or sunlight—heating and cooling systems, ventilation, shading, environmental controls, and lights."

Energy and equipment costs are, by far, the largest drivers of expenses that can bring the price of operating a vertical farm close to $27 per square foot. By contrast, Agritecture’s models show that the cost to run a 100,000-square-foot smart greenhouse is roughly a third as expensive, thanks to the use of natural sunlight and more advanced automation. [I.e.Greenhouses were cheaper to operate]

Each new farm (requires) tens of millions of dollars in investor capital before it can grow a single plant. [The big money is in manufacturing and selling the equipment.]


[Japan is in the vanguard]
Even in Japan, however, an estimated 60 percent of vertical operations are unprofitable.

Companies are yet to successfully produce crops at scale and make it economically feasible to meet the growing food.

Author's Final note: My thoughts are as follows: follow the money. and beware of corporations growing big enough to corner most or all of of a market, in this case, the market for fresh foods. Do you really want one, or even six, for-profit companies to control the food supply for our nation?

Some emphasis [as well as the brackets] are the author's.


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