Money for value
Vertical farming has a number of apparent advantages over open-field farming: It can grow crops throughout the year, reduces land use and offers protection from weather-related issues. Because the environment is controlled, vertical farms can reduce the amount of water and fertilizer used. Pesticides can largely be abandoned as well. Furthermore, the crops are grown in closer proximity to end-consumers: Transport ways are shortened, products are fresher and less food is wasted as a result. On the other hand, vertical farms consume electricity, and they have less need for direct labor than conventional farming conducted under the open skies.
To gain a true understanding of the technology, a holistic value analysis was needed, a study that would examine the broad range of impacts that vertical farming has on society – both in economic and environmental terms. These effects differ based on the local conditions involved. For this reason, OSRAM developed a special application study for New York and examined four technology scenarios regarding lettuce production: conventional open field farming with natural light as the base scenario, greenhouses with traditional high pressure sodium lamps (HPS) or with LED lamps, and vertical farms with smart LED lighting.
What price the world?
The calculation of the environmental and socio-economic impacts of the four scenarios was done together with KPMG using established monetization approaches. “Today, companies are expected to make a positive net contribution to society,” says Arjan de Draaijer, Managing Partner at KPMG. “To determine this contribution, we apply a range of instruments in finance modeling in combination with data sources such as economic impact analysis or environmental and health economics.”