Season 4, Post 45: Farms in the desert
Dubai, a place which receives less than 30 days of rain a year, may not seem the most obvious place for the future of farming. However, it is precisely because of its climate – when your author was there last week, the temperature reached 35 degrees – that Dubai stands at the forefront of farming innovation. Owing to the limited arable land and water in the region, the United Arab Emirates currently imports c90% of its food. When it comes to solutions, the only way (for the region, and others too) is therefore up.
Emirates Crop One (which operates under the brand name Bustanica) opened its doors this summer close to Al Maktoum International Airport at Dubai World Central. It is the largest vertical farm in the world. Although your author was sadly unable to visit on this occasion, Bustanica is an impressive sight, covering 330,000 square feet (or 3,065 square metres). The facility aims to harvest around 1000 tonnes of produce a year. Bustanica – which translates roughly as “your garden” – will begin with spinach, lettuce and kale, but there are plans to expand the range of fruits and vegetables produced with time.
We have noted for some time that the world needs to embrace agtech in order to help match food supply requirements with growing food demands. Russia’s invasion of Ukraine also reinforced the need for countries to think increasingly strategically about their food sources, as we discussed earlier this year. Bustanica is therefore both a logical and necessary innovation. From an environmental perspective, there is also a lot to like. Given its temperature-controlled environment, the facility apparently uses 95% less water than is required to grow comparable crops in a field. Furthermore, no pesticides or fertilisers are used. Although the plant is currently powered by conventional energy sources, the intention is for Bustanica to move to solar over time.
Expect to see more vertical farms springing up around the world. The US already boasts over 2000, Japan has 200 and China over 80 (all data here). As with other industries, falling technology costs and increasing scale benefits are seeing the size and sophistication of such farms improve each year. The global market for vertical farming was worth $3.1bn in 2021, but with some consultants forecasting a 20%+ CAGR over the next five years, the market could reach $10bn in value by the middle of the decade.
14 November 2022
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
Alex Gunz, Fund Manager
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