Is urban farming the future of agriculture

04 December 2017

Urban farming is largely practiced in emerging economies on a small scale commercial or subsistence basis, however, a number of new larger commercial farms have been built in the disused urban spaces of larger cities, such as London.

There might not be a huge number of these urban farms around, but they are a very exciting and positive demonstration of how we can use derelict land to good effect and diversify productivity in the agricultural sector.

Under the streets of Clapham, South London, for example, 7,000 square feet of old air-raid shelters now house the latest hydroponic equipment. The state-of the-art kit is used to grow row after row of different herbs 33 metres below the city’s pavements.

Behind the doors of a warehouse in Beckton, East London, another firm cultivates vegetables and farms tilapia in indoor tanks. Each year the 6,000 square feet of growing space produces enough salads and herbs for 200,000 salad bags, while 4,000kg of fish is produced in the tanks.

Commercial urban farming is still a fledgling industry, but it offers exciting opportunities to the farming sector. It’s a new and sheltered environment in which to develop and perfect new growing techniques, and comes with a very different environmental footprint to many other agricultural businesses.

By selling locally to wholesalers, retailers, restaurants and individual customers transport miles fall to virtually nothing, as do the costs of refrigeration and storage.

In addition to the cost reductions and environmental positives of these new producers they also have a very different risk profile to traditional farming and aquaculture operations.

Having a controlled growing environment significantly reduces the risk of damage from animals, insects and disease therefore enabling growers to produce more consistent crop yields. Weather is largely taken out of the equation and is simply not the significant operational concern that it is for traditional farmers.

However, the city location increases the risk of theft and vandalism plus the use of sophisticated lighting and irrigation systems means there is also exposure to power cuts and electrical failures. 

Similarly, urban fish farms may not have to worry about predators, but they are exposed to machinery breakdown and power failures.

Clearly then, in contrast to traditional crop policies, machinery breakdown risks pose a much greater threat to crop yields than natural catastrophes and it is down to the insurance industry to adapt policies and coverage to reflect the requirements of this new industry.

The challenge for the insurance industry is to be open about using its knowledge of these risks and to apply it in an affordable and accessible way to the new urban farms that are sprouting up across the country. We need to help these ventures map out their risk profiles and understand the exposures they face so they can focus on expansion and efficiencies.

Considering the well-known statistic that food production needs to increase by 70% to feed the 9.1 billion population projected for 2050, developments in urban farming are just the types of innovation that we need to support.

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For further information please contact Harriet Simpson on +44 (0)20 7558 3214 or email harriet_simpson@jltgroup.com