From vertical farming to agrifactory ventures

Agrifuture – Prepare yourself for tomorrow’s agrifactory

Southeast Asia is already known for its immense production of commodities and at the same time is one of the regions with the highest population growth and a rapidly growing middle class. The need for higher yields, increased product quality, the shortage of labor and farm inputs as well as the climate change are only some of the challenges, which have to be overcome to cope with the future demand.  

The 2019 Agrifuture Conference in Bangkok addressed these topics with influential stakeholders to be better prepared for tomorrow’s agribusiness.  It put a spotlight on subjects such as the increase of productivity, climate change, needs for higher yield, shortage of labor, new technologies of agriculture. The conference has been supported by the German Federal Ministry of Food and Agriculture. 

As one highlight of the conference, the necessity, feasibility, regulatory framework and business environment of vertical farming in Bangkok, Thailand, and Southeast Asia had been subject to a panel discussion with international stakeholders in this industry. The event was led by the chairwoman of the German Association for Vertical Farming.

The Association for Vertical Farming is an internationally active nonprofit organization of individuals, companies, research institutions and universities focusing on leading and advancing the sustainable growth and development of the vertical farming movement.

Forther details on the event are available on the conference website.

 

Farming the sky in the “Kitchen of the World” – from vertical farming to farm factory businesses

How to feed the world: Due to an increasing world population, while agricultural land remains limited, conventional agricultural practices will not be able to feed the world. Attempts to increase production appear to be inefficient, by wasting most of the irrigation water used, overusing fertilizers and chemicals, and leading to harmful effects on soil quality.

The great scheme of things: It is the basic concept to move the farming production nearer to the consumer to minimize food miles. This allows reducing the disturbance of the environment to a minimum. Land can be returned to nature. As a long-term vision, agricultural land can become a natural forest again. The four relevant variables are (i) to choose between urban farming, vertical farming, and farm factory, (ii) the use of advanced technology and agriscience, including automatization, robotics, big data, blockchain, machine learning, and artificial intelligence, (iii) architecture, design and location, (iv) legal aspects.

Vertical farming is the practice of producing food in vertically stacked layers and vertically inclined surfaces. Such projects are set-up in a skyscraper, warehouses, or shipping containers. Characteristics of Indoor Vertical Farming (IVF) are the use of highly efficient indoor farming techniques with roughly 50 to 100 times output per space, independence from seasons and time of the day. There is (nearly) no use of pesticides, herbicides, or fungicides. Hydroponic units have 90%+ less water consumption. Under the creation of a microclimate in a sterile environment, all environmental factors can be controlled. This controlled environment agriculture (CEA) technology, assures a super fast-tracked farm-to-fork process.

Farm factory: While the name vertical farming is typically linked to small facilities of a niche industry, farm factories with a high-speed production process in a controlled economic and ecological environment might be the future of agriculture by applying modern technological solutions to the problem of food production. Indoor vertical farming could be the test facilities for a large-scale agribusiness venture. Lettuce, herbs, and microgreens can’t feed the planet alone. Cannabis and other superfood projects can be realized in the vertical farm facility of a shophouse or one floor of an office building, while bigger agriventures need bigger farm facilities.  

Disruptive industry: The development from crop yields for plants grown outdoors in soil, to farming inside a greenhouse, and finally indoors using hydroponics still has a long way to go. After the automation of the agriculture industry and the introduction of pesticides, fungicides, herbicides, the disruptive vertical farming technology can be described as the next big thing for food – although it is still an emerging industry. Land-based fish farming in recirculating aquaculture systems is a similar technology with high potential. However, to gain importance for the agribusiness sector, investors have to think big. The evolving from vertical farming to agrifactories is a necessary next step to feed the world.

Legal aspects: Under Thailand’s legislation and regulatory framework, certain aspects have to be carefully considered. These aspects include building legislation and zoning regulations, the applicability of Thailand’s Factory Act on urban-based plant factories, the scope of investment promotion by Thailand’s Board of Investment, wider agricultural marketplace opportunities, and the disruptive effects of these environmentally superior systems to conventional field agriculture.

Bangkok vertical farming: Currently, no relevant Thai vertical farming project is in place that can deem as a role model for future projects. Published previous ventures seem to be abandoned and their websites are now offline. Also, the vertical farming idea is widely misunderstood and confused with urban farming and the own farm on the rooftop. 

Professional services from vertical farming projects to farm-factory ventures

The Bangkok-based law firm offers comprehensive professional services, transaction advisory support and efficient legal project management for foreign investors in the Land of Smile. This includes the following tasks:

  • Design and set-up of a robust corporate structure to protect the foreign investor’s investment.
  • Advice and support on compliance with Thailand’s foreigner legislation.
  • Investment promotion by Thailand’s Board of Investment, including tax holidays for three to five years,
  • Acquisition of licenses and permissions for the intended IVF venture.
  • Preparation and negotiation of commercial contracts, especially with suppliers and distributors.
  • Ongoing corporate maintenance support.

In close cooperation with the law firm’s network partners, agribusiness projects can be efficiently supported and assisted in these areas:

  • Identification and allocation of property, fit for vertical farming and farm factories in Bangkok.
  • One-stop-shopping for the project company’s legal and administrative infrastructure.
  • Business matchmaking with Thai participants and distribution channels.
  • Introduction to international technology partners.
  • Introduction to bank partners and negotiation of financing opportunities.
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Commercial Greenhouses, Indoor Grow Facilities, Hydroponics, Aeroponics, Aquaponics, Aerofarms, Verticrops, modular farms, skyfarms, robot farms, farm-to-fork, farm-to-fridge, farm-to-table, farm miles, terraforming, post-organic produce, harvest on demand, 

Disclaimer: A little knowledge is a dangerous thing. This low-resolution high-level outlook constitutes neither legal advice nor an attorney-client relationship.

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