Asia-Pacific Vertical Farming
As economies grow and people demand a higher standard of living, personal health and well-being becomes a top priority. An increasing number of consumers in the Asia-Pacific region are searching for fresh leafy vegetables that are free from pesticides and safe to eat raw.
At the same time, there are concerns about the growth in greenhouse gas (GHG) emissions from the Asia-Pacific region. The seminal research paper, 'Food systems are responsible for a third of global anthropogenic GHG emissions' reveals that food systems in China, India, Indonesia and Southeast Asia are among the world’s top GHG emitters.
According to data from the UN Food and Agriculture Organization (FAO), GHG emissions from agriculture in the Asia-Pacific region represent 46 percent of the world total. The increase in GHG emissions from agriculture in Asia-Pacific was significantly higher than the global average (9 percent in Asia-Pacific, compared to 6 percent globally) between the two most recent decades.
These environmental concerns, along with growing consumer demand, represent an opportunity for controlled-environment agriculture.
For those concerned with personal health, controlled-environment agriculture can guarantee zero pesticides because the entire production process is isolated from the outside world. In addition, trace compounds including nitrates, bacteria, heavy metals, parasitic ovum and E. coli can all be monitored and controlled.
For those concerned with mitigating the environmental impact, controlled-environment agriculture effectively eliminates the most polluting aspects of agriculture, which are methane and nitrous oxide associated with livestock, manure management and fertilizer applications. We're also able to reduce food miles by locating our vertical farms in urban areas.
Controlled-environment agriculture and indoor vertical farming offer a premium solution in both cases, but they also come with a premium price tag. Unlike Europe and North America where wealth is more evenly distributed and consumers are willing to pay premium prices, consumer demand in the Asia-Pacific region can very according to the average income.
“One of the biggest challenges that indoor vertical farm operators face in the Asia-Pacific region is pricing. Whereas consumers in Northern Europe and and MENA are accustomed to paying a premium for fresh leafy vegetables, Asia-Pacific markets are far more competitive on price.” - Jesper Hansen, Chief Commercial Officer of YesHealth Group
Prospects for Commercialized Vertical Farming
In most cases, governments are stepping in to fund the initial costs of establishing indoor vertical farms. Singapore, for example, is investing heavily in-line with its '30 by 30' initiative to localize the food supply chain. As a global financial hub, Singaporeans are among the highest earners across the entire Asia-Pacific region and therefore more willing pay premium prices for fresh leafy vegetables.
In Taiwan, the average salary is lower than in Singapore and the average price of leafy vegetables is lowers too, therefore consumers are less willing to pay premium prices for those goods. Taiwanese vertical farm operators need to scale their operations accordingly.
At YesHealth iFarm in Taoyuan, Taiwan, we have effectively scaled our operations to meet consumer demand. Read more about YesHealth iFarm in Taoyuan, Taiwan.