Jun 6, 2022
BASF Venture Capital (BVC) invests in the Indian hydroponics pioneer UrbanKisaan; image sourced from BASF
Editor’s Note: One of Agritecture’s predictions for the future of agriculture in 2022 was that more cities and countries would push urban agriculture policy initiatives forward. As part of this, Agritecture will be publishing more content about the need for increased agriculture in cities globally. This is the second post of a two part series featuring information derived from Agritecture Designer’s findings, and interviews between Agritecture and the Indian CEA consultancies TruFarm Co. and Eat Neat Project. Read the first article HERE.
The post-pandemic world is seeing a growing demand for fresher, safer, and more nutritious produce, increasingly being grown as close to consumers as possible. This has resulted in a global interest in controlled environment agriculture (CEA), a unique solution to meeting this demand. Such has been the case in India.
Mockup of Agritecture Designer’s Commercial Urban Farming course
Drawn in by the hype around vertical farming skyscrapers and venture capital funds, entrepreneurs face numerous startup and design challenges in setting up their own urban farms. Here are the top four obstacles we’ve observed in the struggle to establish a thriving CEA industry in India, aided by data collected through Agritecture’s online farm planning platform, Agritecture Designer:
#1: The battle with policy initiatives and subsidies
According to Agritecture’s consulting partner TruFarm Co., “each state government in India has laid out various schemes in which it is offering a subsidy for setting up greenhouse structures as well as subsidies for setting up the cold chain infrastructure.” This is a result of the government realizing “the importance of protected cultivation and hence wanting more and more farmers to get into the production of crops that are high in quality.”
Despite this governmental recognition, there is a fine line between what types of agriculture are and aren’t subsidized in India. According to consulting partner Eat Neat Project, “there are subsidies for greenhouses and aquaculture operations available but not for vertical farms, or hydroponic and aquaponic operations. Because of this, such operations are not a very profitable option in India, even though they can grow vast amounts of produce.”
The particular challenges of setting up a vertical farm in India are borne out in the data collected by the Agritecture Designer platform: out of all the urban farms modeled in India using the software, only about 20% were vertical farms, with the rest being greenhouse projects.
Image sourced from Krishi Jagran News
#2: Indian entrepreneurs favor greenhouses over vertical farms
Compared to Designer’s global audience which seems to be slightly more interested in modeling vertical farms than greenhouses at a ratio of 3:2 respectively, the data presented above demonstrates that the Indian population favors the latter.
This could be a result of the lack of government subsidies available for vertical farms due to the relative nascency of the industry. The lack of state support results in especially high energy and production costs for vertical farms, which bars access for many. And, in the rare occasion that this type of farming is undertaken, the cost burden is pushed onto consumers.
#3: Droughts and power outages
India has a history of severe droughts that has forced farmers to either sell their ancestral lands, or has left them without enough food to feed their families, much less to sell and earn a living.
While CEA may be able to aid by reducing the amount of water needed to produce the same amount of harvested produce, hydroponic and aquaponic integrations can be expensive investments.
Herbivore Farms, in Mumbai's Andheri, is spread across 1,000 sq ft and grows about 2,500 plants; image sourced from Forbes India
Additionally, there is also the challenge of unreliable energy sources, with power outages being a common problem in many areas throughout the country. The option of installing backup generators here would represent yet another upfront cost which reduces accessibility for new vertical farmers.
According to our data, the most popular region for models in Agritecture Designer was the western state of Maharashtra — one of the most urbanized states in the country, with the largest economy, and the highest levels of power generation. It could be that the more robust economic infrastructure of this state, which steadies entrepreneurs against factors such as extreme climates and unreliable energy sources, explains its preferred location for CEA businesses.
One other interesting tidbit of data we found was that Indian farms modeled in Agritecture Designer had an average site area of just 8,456 ft2 compared to the average farm size in India of 129,167 ft2 (1.2 hectares or 15x larger). It’s possible that a CEA facility of this size could outproduce its field counterpart, but many more factors would need to be known.
#4: The knowledge gap for farmers
TruFarm Co. shares that “the Indian farmer lacks access to scientific knowledge about soil and crop health, and global agronomy practices, alongside knowledge about new methods of integrated pest management.”
Here, Agritecture’s Commercial Urban Farming master class can be an asset. It provides the foundational knowledge for anyone (experienced or not) to set out on planning their urban farms. Take a look!
Both Eat Neat Project and TruFarm Co. can aid CEA entrepreneurs in building out their operations.
With a hydroponics focus, TruFarm Co. has set up their own “state of the art CEA farm which acts as an R&D center for all our clients. We first try out different growth recipes at our R&D center and then further offer the solutions to our clients. We also have a full stack design & engineering team which helps design world class greenhouses and indoor farms. The key metric here is energy management and how to reduce CapEx (capital expenditure) for a better ROI (return on investment).”
Image sourced from Analytics India Magazine
Additionally, TruFarm Co. relies on local sourcing and works with the local industries to foster a collaborative ecosystem for the future of agriculture.
Meanwhile, Eat Neat Project has expertise in aquaponics. They’ve built the first aquaponic farm in India, and are now looking to spread their knowledge through consulting projects that focus on farm design and financial calculations. “We design it so that clients know the fish to plant ratios match, plus we design the plumbing drains through which the water should flow, and we also help clients get subsidies from the government.”
The Eat Neat Project team also has experience working with universities. “For the University of Agricultural Sciences in India, we’re setting up a small demo aquaponic farm that will be used for teaching. The project will likely push government bodies to start recognizing aquaponics and hydroponics as something that they should subsidize.”
Despite the challenges new vertical farmers may be facing, both companies agree that “the future is bright” for CEA in India. TruFarm Co. predicts that “India will very soon start producing high value soft fruits like strawberries, blackberries, and blueberries at scale with a year round production model.” Eat Neat Project also emphasized that high-tech solutions will only reach their full potential with the help of more government subsidies and entrepreneurial support.
