INTELLIGENT GROWTH SOLUTIONS LIMITED – WRITTEN EVIDENCE (HSI0059)

1.1 Summary

The UK’s horticulture sector is facing increasing pressure as a result of a multitude of factors that have combined to produce the perfect storm, including: 

-          Rising energy costs – gas prices impacting greenhouse production; electricity prices preventing the adoption of greener, more sustainable forms of agriculture; rising costs for fuelling machinery

-          Lack of access to labour – Brexit challenges, issues with border controls, perception of careers in agriculture or horticulture, lack of access to the sector

-          Cost of fertiliser – rising costs as a result of conflict in Ukraine

-          Climate-related challenges – such as increasing incidents of extreme weather – drought, unpredictable or heavy rainfall, flooding, etc.

-          Soil degradation as a result of modern intensive agriculture practices

-          Challenges to supply chains – lack of available drivers, challenges with border controls, shipping costs (both for whole crops and for seedlings)

All of these factors have combined to deliver an annual rate of food inflation that currently stands at 16.8%[1]. There is a clear need to consider an approach to horticulture that integrates technology to deliver a system that is sustainable in the long term and able to deliver food security to the UK’s population.

While there is no single silver bullet solution, we believe that vertical farming has a significant role to play in delivering a sustainable supply chain for the future. With global market growth in vertical farming predicted to achieve 20.8% per annum from 2023 to 2032[2], it is important that the UK considers this sector seriously and how it has the potential to harness the technology for food production, and also to generate prosperity and jobs.

We have the ability in the UK to deliver this technology and generate jobs in areas as varied as engineering, plant science, horticulture, data analytics and software development. Beyond that there is considerable potential as this industry grows to deliver jobs in manufacturing, supply chain, catering, retail, horticulture and agriculture.

1.2 About Intelligent Growth Solutions (IGS)

IGS is a multi-award-winning global business, headquartered in Scotland, which designs, supplies, and supports vertical farming infrastructure for growers all around the world.

We blend engineering, crop science and agronomy skills to build the best technology to allow our customers (the growers) to succeed. Our vertical farming systems use Total Control Environment Agriculture (TCEA) to manage each stage of the growth cycle and all operational inputs. The software determines optimal recipes of weather and manages the operation of the farm: lighting, watering and ventilation, as well as applying nutrition.

IGS has a unique market position amongst vertical farming technology vendors due to our long-standing covenant with the market never to grow crops for commercial scale. We are an agricultural technology innovator, focused on research and development: the crops we produce at our Crop Research Centre are only ever for our own or customer trials. This allows us to focus on what we do best: combining engineering and science disciplines and experience to deliver cutting-edge technology that allows our customers, the growers, to produce high-quality crops reliably year-round. This includes a broad variety of crops including full seed to harvest crops such as herbs or leafy greens, fruiting crops such as chillies and tomatoes, brassicas, propagules or seedlings such as seed potatoes and strawberries, and even non-edible crops such as those for the fragrance or pharmaceutical industries or tree seedlings for reforestation.

This business model has allowed us to remain focused on delivery to customers across the world, without the distractions of needing to produce and sell crops commercially ourselves. Our technology allows customers to diversify existing production, complementing more traditional forms of agriculture and delivering a hybrid solution to the challenges facing horticulture. 

2.1 The opportunities presented by vertical farming to UK horticulture

Brexit, COVID, the conflict in Ukraine, and the ever-increasing evidence of climate change have all brought the need for food security and supply chain resilience into sharp relief. Food security can be achieved through agricultural innovation and vertical farming is a fundamental part of that. Vertical farming offers a secure, controlled, indoor environment, independent of weather and location to provide a sustainable, secure food supply across a range of crops.

Vertical farming cannot solve the challenges global agriculture faces alone, rather it offers a progressive, modern way to complement existing agricultural methods so that the planet can sustain an ever-increasing demand for food.

It does this in a number of ways:

-          Improved resilience against climate change – growing in a controlled environment allows farmers a reliably high-quality crop, with consistent yield, 365 days a year, independent of weather

-          Reduced water consumption - the biosecure closed-loop fertigation system reuses 95-97% of water: the only water leaving the farm is in the crops

-          Reduced dependency on imports – relocalisation of food production close to the point of consumption by growing crops that are usually imported in a vertical farm

-          Reduced food miles – vertical farms can be located on brownfield or urban sites, or retrofitted into existing or disused structures, meaning that crops can be grown close to the consumer, minimising food miles

-          Reduced waste by improved shelf-life – no pesticides or herbicides are used, meaning crops don’t have to be washed and have a longer shelf-life

-          Increased nutritional value for consumers – crops don’t travel as far to the consumer, preserving nutritional value

-          Reduced risk for farmers – diversified revenue streams and guaranteed yields

-          Minimised labour costs: a fully automated growing environment requires minimal human interference

2.2 The barriers preventing wider adoption of vertical farming

There are certain inhibitors to expansion and adoption of vertical farming facilities both by existing growers, as well as new entrants to the market.

• Finance to get started – investors are cautious around committing to a nascent technology
• Permission to build
• Energy prices
• Lack of industry expertise – as a new industry, knowledge of vertical farming is still in its early stages and there is a long way to go until we can confidently say we understand all there is to know about growing in a Total Controlled Environment Agriculture system
• Lack of funds to speed up R&D to mature the industry

2.3          How can vertical farming technology integration be supported?

It is often the case that indoor farming in the urban environment is not given the same advantages as traditional agriculture which makes the produce from these systems less price competitive. It is therefore vital that certain areas of policy are considered critically to ensure the sector’s viability as part of the agricultural and food production mix in the UK.

We propose the following:

-          The equivalent of “Red diesel” for green electricity for sustainable horticulture:

• We recommend introducing tax incentives on the electricity paid on vertical farms, in a way that is similar to that of a more traditional farming environment. Power is a fundamental cost on vertical farms, and while IGS technology has been designed to considerably reduce the consumption levels, it is a major factor when adopting this model.

-          Business rates:

• We also recommend that policy be introduced that considers removing, or minimising, the rates requirement on vertical farming buildings which are currently considered industrial/food production businesses, rather than agricultural.

-          Planning and building regulations:

• We believe that planning and building warrant regulations should be reviewed to meet the requirements of indoor farming as opposed to vertical farms being designed to fit into the existing requirements for classification as Agricultural developments. A clearer approach for national planning policy guidelines is crucial, particularly when bringing growing into the urban environment.

-          Funding support for growers looking to incorporate technology into business models:

• We believe there is demand for grants and subsides, developed to enable growers to adopt vertical farming either as a means to diversify existing business models or in setting up new operations.
• There is also need for greater funding support for research & development for the sector to ensure that technology continues to prioritise energy efficiency and high-quality, nutritious produce.

-         Government procurement committing to sourcing locally:

• To help deliver transparency in the supply chain, as well as show commitment to a reduction in food waste and food miles, there is a greater potential with vertical farming to deliver food in local urban (and rural) areas. This can be procured and produced for schools, hospitals, care homes, prisons etc. from local vertical farms.

-          Updated food safety and organic standards to consider food grown using TCEA:

• Growing in an IGS vertical farm requires no pesticides, fungicides or biocides. Nutrients are provided through a closed-loop irrigation system. All water is harvested from rainwater and is recycled. The only water used is in crops and we are reducing root formation where possible. There is no risk of nitrate run-off into natural water courses. We guarantee less wastage by growing to order and using our system to ensure zero crop failure. The produce is fresher to market and has a longer shelf life.  These benefits mean several advantages over ‘Organically’ branded produce. We believe that a new kitemark or label for food grown indoors in a controlled environment should be introduced.

-          Investment in education:

• As a new industry, trained vertical farming operatives are in short supply. We believe that investment in educational programmes would not only bring fresh talent into the industry, but could reinvigorate careers opportunities in horticulture and agriculture, attracting people from a diverse range of backgrounds.

10 April 2023