SINGAPORE needs to deepen its interests in food production, not just consumption, with strategic partners like Australia. One approach to this is redirecting some of its tech, digital strategies and sharing of IP to scaling up smart food zones based on technology-enabled farming (TEF).
Agricultural technology – or agtech – has become a billion-dollar industry. There has been a surge in the growth of plant factories in Japan from 39 in 2009 to 191 in 2015. It is not surprising then to find that 20 per cent of food production takes place in these urban farms. In 2016, even with some investment pullback, agtech start-ups globally drew more than US$3 billion in funding. [ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”2,3,5″ ihc_mb_template=”1″ ]
Data collected by Agfunder shows that investment grew in four categories – ag biotech (150 per cent), farm management software including sensing and Internet-of-things (3.7 per cent), supply chain technologies (3 per cent) and novel farming systems (63 per cent). So, if anything, the role of the farmer remains important with a supporting industry that is fast evolving, especially around the urban farmer.
Singapore has housed agtech R&D champions like Sky Greens and Panasonic – companies that have developed technologies to make urban farming productive. Improved production capacities of at least 10-fold, less use of input materials and at least 90 per cent less use of water resources are just some headline benefits these technologies have produced.
A common opposing view to urban farms is the high capital investment and energy requirement for controlled environment agriculture to be viable. However, with light emitting diode (LED) technology advancements, the price of LED equipment has fallen almost 80 per cent over the past seven years and is set to drop further while efficiency has grown significantly. The big plus includes being able to manage predictable production cycles for crops like vegetables by minimising the weather factor.
Cynics may cite the recent experiences of PodPonics or FarmedHere, which shut down commercial-scale urban farm operations in the US, as a failure of the urban farm industry. As the technologist and architect founders of the two companies shared in recent public interviews, despite off-take agreements of US$25 million, healthy margins of over 20-25 per cent in place and growing demand for the products, they decided to focus on agtech instead of being involved in the entire supply chain. The company founders have set up their next agtech ventures and are on the path to urban farming 2.0.
So, arguably the investment, technology and operating costs show promise. What about the consumer market? Also, with Singapore’s land constraints, how would an urban farm here commercialise and scale up?
The urbanisation trend across most of Asia continues to take shape. Consumer data collected by researchers at Murdoch Singapore from markets such as Malaysia, Thailand and Hong Kong, even Singapore and Australia, show that consumption of high-value leafy and non-leafy vegetables and fruits by these urban populations is on the rise and likely to grow by over 20 per cent in future.
Willingness to pay
In addition to increased demand, some of these markets were found to be not price sensitive and instead, more focused on getting access to nutritious, safe and certified products. Consequently, almost 50 per cent of respondents indicated a willing-ness to pay at least a 10 per cent premium for products grown in safe environments such as Australia.
Let’s consider Singapore’s food demand. Singapore currently imports over 500,000 tonnes of horticulture products from around the world. Most of the eggs and chicken consumed here come from a handful of source countries. With a very small portion of its domestic demand being homegrown, Singapore needs to consider deeper production ties.
But with Singapore aspiring to be a Smart City, where do smart urban farms feature? For urban technology-enabled farming to be successful, the market-product-technology elements have to be in sync, which seems to be the case now.
Given its land constraints, the ability to scale commercial urban farms in Singapore is a challenging task. So how would Singapore gear up to be an agtech leader in the region?
Similar to the ethos that saw the Singapore-Jilin Food Zone take shape, an agtech partnership for smart urban farms can be created. A major requirement for such a partnership is scale-up capacity. For instance, Western Australia recently announced its foray into agtech with the creation of the 28,000 hectare Peel Food Zone. This is almost four times the area of the Jilin Food Zone.
With favourable political conditions, a reputation for producing safe and quality products, geographical proximity and a deepening comprehensive strategic partnership between the two countries, it is not difficult to see a future where the Peel FZ delivers a significant portion of Singapore’s food demand.
Mobilisation of this zone with proof-of- concept farms that showcase Singapore’s agtech providers such as Panasonic and Sky Greens can be a logical start. This partnership can further propel Singapore’s status as a logistics and trading hub, this time in agrifood, deepening its tentacles into Asia.
What can be even more advantageous is the potential for Singapore to play a vital role in connecting Jilin and Peel, whereby technology developed in Singapore connects markets and products from these two regions. So, can the Smart City make space for smart urban farms?
So, arguably the investment, technology and operating costs show promise. What about the consumer market? Also, with Singapore’s land constraints, how would an urban farm here commercialise and scale up?
THE AUTHORS
Paul Teng is Principal Officer, National Institute of Education and Adjunct Senior Fellow at the Centre for Non-Traditional Security (NTS) Studies, S. Rajaratnam School of International Studies (RSIS), Nan-yang Technological University.
Christopher Vas is Director of Murdoch University’s first offshore R&D centre, the Singapore Centre for Research in Innovation, Productivity and Technology (SCRIPT). Both were members of the Second Murdoch Commission which published the 2016 report on “Food Security, Trade and Partnerships”.
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