Peo­ple and power costs keep in­door farm­ing down to Earth

The Oklahoman (Sunday) - - BUSINESS - BY RYAN NAKASHIMA AP Tech­nol­ogy Writer

There's a bud­ding in­dus­try that's try­ing to solve the prob­lem of the limp let­tuce and taste­less toma­toes in Amer­ica's su­per­mar­kets.

It's full of tech­nol­o­gists who grow crops in build­ings in­stead of out­doors, short­cut­ting the need to pre­ma­turely har­vest pro­duce for a bumpy ride of­ten thou­sands of miles to con­sumers in colder climes.

More than 30 high-tech com­pa­nies from the U.S. to Sin­ga­pore hop­ing to turn in­door farm­ing into a ma­jor fu­ture food source, if only they can clear a stub­born hur­dle: high costs.

These com­pa­nies stack plants in­side cli­mate-con­trolled rooms, parse out nu­tri­ents and wa­ter, and bathe them with spe­cial­ized light. It's all so con­sumers can en­joy tasty veg­eta­bles year-round us­ing a frac­tion of the wa­ter and land that tra­di­tional farm­ing re­quires. Farm­ers can even brag the pro­duce is lo­cally grown.

But real es­tate around cities is pricey. Elec­tric­ity and la­bor don't come cheap. And un­like spe­cialty crops like newly le­gal mar­i­juana, veg­gies rarely com­mand pre­mium prices. (It's tough to com­pete with plants grown in dirt with free sun­light, af­ter all.)

Even the best-funded in­door farm­ing com­pany on the planet — Plenty, which has raised nearly $230 mil­lion so far — has em­braced a long­time farm­ers' crutch: gov­ern­ment hand­outs. It hasn't found any tak­ers yet.

"We be­lieve so­ci­ety should con­sider in­vest­ing in this new form of agri­cul­ture in the way it in­vested in agri­cul­ture in the 1940s," said Plenty CEO Matt Barnard in a re­cent in­ter­view.

Barnard says public aid — in the form of cheaper power — is one way to turn a good but elu­sive idea into a sus­tain­able ven­ture.

Last year, the U.S. paid farm­ers $9.3 bil­lion in di­rect sup­port, and sub­si­dized weather-re­lated crop in­sur­ance to the tune of $5.1 bil­lion. In a nut­shell, Barnard ar­gues that some of that money could be di­verted to crops that grow in rain or shine.

Plenty grows kale, mixed greens, basil and nat­u­ral sweet­ener ste­via in a gray, low-rise ware­house com­plex in the in­dus­trial sub­urb of South San Fran­cisco.

Vis­i­tors ar­riv­ing via the back door must don full­body over­alls and rub­ber boots dipped in dis­in­fect­ing shoe baths be­fore en­ter­ing the air­tight workspace.

Seedlings are grown on flatbeds and bathed in pur­ple light that gives them the look of a 3-D movie watched with­out glasses. Ma­tur­ing plants are stuffed into col­umns where they grow side­ways, fed by drip ir­ri­ga­tion, and ir­ra­di­ated by col­umns of light-emit­ting diodes.

The plants will be clipped and pack­aged be­fore head­ing to stores later this year.

But there are some no­tice­able gaps in the menu. There are no car­rots or toma­toes, be­cause long roots that grow down and vines that re­quire hu­man prun­ing don't do well on walls.

For in­door farms, mak­ing money has largely meant ship­ping in bulk to gro­cery stores, a co­nun­drum if costs aren't in line.

Scal­ing or fail­ing

In­vest­ment in in­door farm­ing soared to $271 mil­lion last year, up from just $36 mil­lion in 2016, ac­cord­ing to mar­ket re­search firm Clean­tech Group.

"The ques­tion is, how are they go­ing to scale?" asks Pawel Hardej, CEO of Civic Farms, a ver­ti­cal farm­ing con­sul­tancy in Austin, Texas.

There have been plenty of in­door farm­ing fail­ures al­ready.

FarmedHere shut­tered its op­er­a­tions in Louisville, Ken­tucky, and Bed­ford Park, Illi­nois, in Jan­uary last year due to cost over­runs.

Ge­or­gia-based PodPon­ics, which filed for bank­ruptcy in 2016, cited la­bor costs as its big­gest drag.

Google's X, the search gi­ant's se­cre­tive "moon­shot fac­tory," killed its in­door farm­ing ef­forts be­cause it couldn't grow food sta­ples like grains and rice.

Even fans of the tech­nol­ogy aren't sure it can beat an­other shel­tered al­ter­na­tive: green­houses.

"Ver­ti­cal farm­ing to a lot of (in­vestors) is an 'if' and a 'maybe' ver­sus a 'when,'" says Clean­tech ad­viser Yoachim Haynes. "The ques­tion that needs to be an­swered is, 'Can they do it with cheaper elec­tric­ity and cheaper la­bor?' This is not a ques­tion that many have been able to an­swer."

Barnard says Plenty can pros­per if it spends 3 to 5 cents per kilo­watt hour on power — well be­low the 10.4 cents that is the av­er­age price na­tion­wide, ac­cord­ing to the U.S. En­ergy In­for­ma­tion Ad­min­is­tra­tion.

While Plenty an­nounced plans to build a 100,000-square-foot fa­cil­ity in the Seat­tle sub­urb of Kent in Novem­ber, it said it isn't in talks about power breaks with any U.S. city now.

Most public sup­port has so far been in re­bates for en­ergy-ef­fi­cient light­ing, not run­ning costs.

Seat­tle City Light pro­vided $10,000 worth of en­ergy-ef­fi­cient light­ing to an in­door grow­ing fa­cil­ity that helped feed the city's home­less. But it al­ready of­fers the low­est power rate of the top 25 cities in Amer­ica. "That's the deal that's on the ta­ble," says spokesman Scott Thom­sen.


Se­nior grower Molly Kreykes, left, and as­so­ciate grower Jess Kowal­ski in­spect chives grow­ing on tow­ers in the grow room at the Plenty, Inc. of­fice in South San Fran­cisco, Calif. More than 30 high-tech com­pa­nies from the U.S. to Sin­ga­pore hop­ing to turn...

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