Financing local food factories.

Author:Miller, Stephen R.
 
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Introduction I. The Maw of Urbanized Populations II. Local Food, Fast but Slow III. Massive Alternative Urban Agricultures IV. Financing Local Food Factories Conclusion "They used to grow food in Kansas Now they want to grow it on the moon ..."

--Bob Dylan (1)

"Without funding, the vertical-farm concept will simply disappear into the government warehouse featured in Raiders of the Lost Ark...."

--Dickson Despommier (2)

INTRODUCTION

This Article seeks to provide an argument for how large-scale, or "massive," alternative urban agricultures can be successfully financed. The goal here is not exhaustiveness; indeed, a thorough review of all potential funding sources could be several times as long and still not cover the basics. Instead, this Article seeks to change how local food is conceived in terms of financing. This unusual approach could yield several important benefits. First among them being that large-scale local food production in urban areas could become more common.

Part I of this Article explores the reasons why massive alternative urban agricultures are necessary today: the difficulties associated with feeding a rapidly growing, and rapidly urbanizing, population. Part II explores one particular massive alternative urban agriculture--the vertical farm. (3) By focusing on the vertical farm, the importance of financing, as a critical component in growing local food, is brought into focus. In Part III, the Article first explores the example of financing for what is proposed to be the nation's largest vertical farm, AeroFarms, in Newark, New Jersey, which illustrates how creative financing can facilitate massive alternative urban agricultures. Part IV then considers how several types of existing--and potential--financing could be deployed in a manner modeled on economic development agreements typically used for factories and other manufacturing uses to advance the cause of local food. By viewing local food as a finance problem, and in particular a finance problem similar to that of urban manufacturing, the prospects for significantly scaling up the production of local food, and perhaps even disrupting agricultural production as it has been practiced for millennia, begins to take shape. It provides a way forward for an agriculture that would ultimately be more economical, more sustainable, and ironically, more urban than any in the past.

  1. THE MAW OF URBANIZED POPULATIONS

    The need to rethink agriculture arises from both tremendous population growth and rapid urbanization of that population. A brief review of population and urbanization statistics makes this evident.

    In 1960, world population exceeded three billion for the first time. (4) In the next forty years, population doubled, reaching nearly six billion in 2000. (5) World population is expected to reach nine billion soon after 2040. (6) Strikingly, 90% of the 2.5 billion persons projected to be added by 2050 will live in Asia and Africa. (7) After 2050, world population growth is expected to taper off with lower global population growth rates expected in the latter part of the twenty-first century. (8) In the United States, population is also expected to grow, with population projected to grow from 319 million in 2014 to 417 million by 2060. (9) The U.S. population is estimated to reach 400 million just after the mid-century mark of 2050. (10) 11

    As population has increased, it has also become increasingly urban. In 2007, the global population was predominantly urban for the first time ever." (11) That urbanization landmark capped six decades of rapid urbanization that largely mirrored world population growth. (12) In 1950, 70% of the world population lived in rural settlements, and just 30% lived in urban settlements. (13) By 2014, 54% of the world's population was urban. (14) By 2050, global population is expected to be 34% rural and 66% urban. (15) In other words, in just one hundred years, the world's population will go from two-thirds rural to two-thirds urban. A remarkable transformation without precedent in human history. At the same time, rural population has grown slowly since 1950, is near its peak, and is expected to start declining by 2050, especially as Africa and Asia--where 90% of worldwide rural populations live--begin to urbanize. (16) In the U.S., urbanization largely happened during the twentieth century: in 1910, just 46% of the U.S. population lived in urban areas; by 2010, more than 81% did so. (17)

    However, as the world's population urbanizes, almost half of the world's urbanites live in settlements of less than 500,000, while just one in eight live in the twenty-eight mega cities with more than ten million residents--such as New York City or Tokyo. (18) This means that most urbanization is not happening in centers of administrative or governmental power, but in second--and third-tier cities that often lack resources to influence urbanization.

    This population growth, and its commensurate urbanization, results in an equally commensurate growth in the need to feed a growing population and to deliver food to an urban location. One estimate found that, if existing farming techniques were used, just meeting the demand of the three billion new people expected to be added to the planet between 2010 and 2050 would require new agricultural acreage equal to the size of Brazil. (19) Further, this new agricultural acreage would exacerbate already strained resources from existing agricultural operations. (20) Several examples serve to illustrate how existing farming techniques will not be able to meet the growing population demand and, in addition, are poorly suited to the new geography of predominantly urban life.

    First, existing farming techniques strain water resources. Agriculture, including irrigation, livestock watering and cleaning, and aquaculture, utilizes 70% of available fresh water globally. (21) Although water use for agriculture varies substantially by location--Europe uses just 21% of its water withdrawals for agriculture while Africa uses 82% for agriculture -the overall trend in water use is outpacing population growth and fed by agricultural demands. (22) For instance, global water withdrawal was less than 600 [km.sup.3]/year in 1900 but was 4000 [km.sup.3]/year in 2010, a rise 1.7 times greater than population growth. (23) In the U.S., 40% of water withdrawal was used for agriculture in 2005, a number that also varies dramatically by region. (24)

    Second, farm runoff is the most damaging form of pollution in the world. (25) The U.S. Environmental Protection Agency (EPA) notes that agricultural runoff is "the leading source of water quality impacts on surveyed rivers and streams, the third largest source for lakes, the second largest source of impairments to wetlands, and a major contributor to contamination of surveyed estuaries and ground water." (26) These problems can be local, such as phosphorus loads in local streams and rivers, (27) but also national in scope, such as the large oceanic dead zones that form where large rivers flow into oceans carrying with them a whole river basin's worth of pesticides and fertilizers. (28)

    Third, because food is not grown near where it is consumed, greenhouse gas (GHG) emissions resulting from the transport of food--whether to slaughter, to market, or as feed--are far in excess of what they would be if food was grown near where it was consumed. (29) This is especially true for highly perishable produce and frozen products that require air transport and refrigeration during travel. (30)

    Fourth, climate change brings with it a need for resilience in agricultural production. Existing farming techniques suffer at the behest of extreme storm events that are on the rise. (31) In addition, climate change favors crops that are resilient and adaptable to greater change. (32) Existing farming techniques have bred such adaptability out of large-scale crops, like corn or soybeans, which require more interventions in terms of production, fertilizers, and herbicides to keep these highly-modified crops tenable in uncertain times. (33)

    Fifth, traditional farming economics are especially difficult now. Most agricultural production presently occurs on mega-farms, even though the number of small farms continues to grow. For instance, the 2012 Census of Agriculture found that 75% of U.S. farms sold less than $50,000 in agricultural products while 57% had sales less than $10,000. (34) For most "farmers," farming produces less than 25% of household income and 61% worked off-farm to make ends meet. (35) On the other hand, some 55% of farmland in the country is held by just 4% of farms that are over 2000 acres, a fact that illustrates that much of the farmland, and much of the food produced in the country, is the product of a few, very large agribusinesses. (36) The reason for small farmers' difficulties is not surprising: farming in soil requires the cooperation of weather patterns that are often anything but cooperative and are increasingly dependent on artificial conditions--such as irrigation--that face increasing challenges with climate change. (37)

    For this reason, it is likely that existing farming techniques in soil are not a long-term sustainable solution to meeting this century's growing, and urban, food needs in the long term. (38)

  2. LOCAL FOOD, FAST BUT SLOW

    Given the scale of urban populations that the twenty-first century must feed, one of the most ecologically valuable contributions that could be made would be an alternative to existing agriculture that was large in scale and close to urban environments. The last few decades have seen a tremendous rise in interest in local food--a promising sign for the future of food production. Unfortunately, despite the rise of local food, its growth is not fast enough to significantly impact the environmental challenges today's agricultural practices pose, much less feed the staggering growth in population that is coming.

    The rise of local...

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