For generations, northern California’s Sacramento Valley has been one of the world’s top producers of rice, but that changed in 2022. Paddies were baked dry in the drought desiccating the American West, and consequently rice-land production in the state was cut in half, recently reported the California Rice Commission.
Around the world, Golden State rice farmers were hardly alone.
In China, the summer months were the hottest and driest since reliable record-keeping began in 1960, while the Yangtze River sank to record lows. Four Chinese government departments issued a notice in late August urging the conservation of “every unit of water to protect crops,” reported France 24 news.
In Europe, the summer drought may be the worst the continent has experienced in 500 years, reported the BBC. Germany’s iconic Rhine River sank so low that ordinary shipping was curtailed for lack of draft.
In Africa, dry weather struck the Congo while South Africa was hit by flooding — a pattern seen elsewhere, such as the United States, where the Southeast was inundated by rain, while the Southwest roasted.
“Downpours are hitting Pakistan, the U.S. and China, even as the planet is also besieged by crippling drought,” reported Bloomberg.
While it is too soon to declare droughts and floods as the new normal, recent exaggerated weather patterns have persisted alongside the much-noted warming of the globe.
It may also be early to say if land values in general could be affected, urban or rural, although it is clear some farmland will become unproductive. Certainly there are prospects that agricultural property with assured water supplies and proximity to markets will become more valuable, as water and oil (think transport costs) become scarce in the decades ahead.
Moreover, the problem of rain deficits is being compounded globally by the nearly irreversible over-pumping of groundwater resources such as the Ogallala Aquifer in the Great Plains of the United States, or the Indus Basin aquifer in Northwest India and Pakistan.
Ominously, there is a precedent for a ruined aquifer: Infamously, the Arabian Aquifer System was over-pumped by ambitious Saudi Arabian agricultural development programs of the 1980s and 1990s, resulting in dried-up springs and remaining groundwater too brackish to be of use. The debacle was a warning for the rest of the world, and Saudi Arabia abandoned groundwater-dependent farming. Not that many options were available. It doesn’t rain much in Saudi Arabia — a situation in 2022 that defined huge swathes of farmland worldwide.
Water has been becoming a more precious resources for decades, as the world’s population has expanded and pollution contaminates already scant supplies. Globally, about 70 percent of freshwater is used in agriculture.
Irrigated agriculture represents 20 percent of the global cultivated land, but 40 percent of food produced worldwide, reported the World Bank.
For farmers, water shortages are becoming chronic headlines, and barring a swift turnaround from recent weather patterns, the agriculture sector will have to adapt, to use less water but still produce, even sans normal rain seasons. For some geographic regions and crops, the challenges may prove insurmountable. But new products and water-saving technologies are hitting the market like the rain isn’t, offering hope that dry seasons can be managed if water is sparingly used.
Hydroponics and aquaponics are two buzzwords in modern agriculture, describing the growing of produce without soil, or the combination of growing fish and produce in the same closed system, usually indoors.
When it comes to water efficiency, there is no gainsaying hydroponics: Through the use of recirculating systems, and technologies such as indoor vertical towers or semi-covered ponds, hydroponic systems are credited with using 95 percent less water than traditional outdoor produce fields. In general, hydroponics has been touted for arid regions, which, of course, may soon define more of the world if present trends continue. It may be that low cost near-urban properties lend themselves to profitable hydroponics.
However, the Massachusetts Institute of Technology, which has long been active in hydroponics and sustainable agriculture, nevertheless recently summed up hydroponics’ “cons” accordingly: “Typically … hydroponic systems have high energy costs because they incorporate lighting, pumping and air moderation systems.”
High energy costs in a world of rising electrical bills pose challenges.
In addition, the upfront capital costs of a hydroponics operation can be daunting. Not only must land be purchased or leased, but then also an enclosed structure constructed, and then plenty of plumbing installed to move water around continuously in an artificially lit, air-conditioned environment. In addition, hydroponics, with onerous upfront and energy costs, must succeed in the face of huge economies of scale in present-day traditional agriculture, as well as traditional farming technologies and crops that have been improved upon steadily for millennia — and are still being improved, such as in the case of drip irrigation for conventional farm fields, or new varieties offering higher yields.
Though many new hydroponics and aquaponics ventures have been started, as a fraction of global food production such efforts are minute and will be for many years.
The global food market was estimated at $8.55 trillion in 2022, by the Statistica Global Consumer Survey. Even optimistic industry forecasts place global hydroponics production at $13.4 billion by 2027. Moreover, pure hydroponics is generally limited to leafy vegetables, such as kale and lettuce, though there are some tomato ventures. But as more of the world becomes arid, the appeal of water-efficient indoor farming could increase.
“Far from being a pipe-dream, hydroponic farming is already being rapidly integrated into current food networks,” concluded a recent study from the Princeton Student Climate Initiative.
The city-state of Singapore faces a problem in an age of growing geopolitical and agricultural turmoil: It imports nearly all its food, an Achilles’ heel and anathema in a small nation that covets trade surpluses.
Tropical and wet, Singapore, it turns out, is very exposed to global droughts, and the city’s reaction may be a harbinger of future global trends. Singapore has been a watchful bystander to the drought and food commodities shortages of 2022, which brought an uncomfortable rising tide of food export bans to the globe, such as India’s bar on the export of certain types of rice in September. The World Bank reported in the first half of 2022 fewer than 74 nations implemented export restrictions on food, all in response to domestic shortages.
Due to the increasing uncertainty of global food supplies, Singapore state authorities in 2019 began implementing “30 by 30,” an ambitious program to grow inside the city’s heavily urbanized confines 30 percent of food consumed by 6 million Singaporeans by 2030. Singapore has 715 square kilometers, or about 276 square miles of land. By way of comparison, New York City proper is similar, in that it has 8.6 million residents and 303 square miles of land.
Imagine farming in Brooklyn, Manhattan or Queens to provide 30 percent of the city’s food needs.
Singapore has set aside almost $100 million in subsidies and government support, and has obtained some impressive results, including an eight-story fish farm, and an urban poultry farm that produces 625,000 eggs daily with 100 workers.
Singapore is also promoting “aquaponics,” in which fish and vegetables are grown together under one roof, with the plants cleaning the water fertilized by fish.
While there are more operational urban farming facilities in Singapore, there is not yet a track record on whether the effort can become self-sustaining, or will continue needing subsidies and other government assistance to survive.
Other food-short nations are also exploring hydroponics, such as United Arab Emirates, which recently opened Bustanica, a 330,000-square-foot vertical indoor farm, to provide leafy vegetables for salads served in the government-owned Emirates airline.
In 2019, the Australia-based Nectar Farms announced it would invest $220 million to build 30 hectares of glass greenhouses powered by solar energy, in the town of Northern Grampians Shire, in the state of Victoria. A veritable hydroponics powerhouse was blueprinted, and some structures erected.
“The [Nectar Farms] facilities will boast regulation of light, moisture and air, CO2 enrichment, and automated cooling and heating, watering and monitoring systems,” reported an enthused trade press.
The Nectar Farms project was large enough to even offer some economies of scale, a strength lacking in most hydroponic efforts. Unfortunately, by 2021 Nectar Farms had gone into liquidation, to the grim lamentations of city elders.
“It is very disappointing. There has been a lot of time and money injected into this overall, and there was a lot of expectation surrounding jobs, housing — everything that involved attracting people to the region,” said Murray Emerson, mayor of Northern Grampians. “As a council we’ve spent seven years helping guide the company with everything such as planning applications, buying land, you name it. We’ve pretty well assisted them from the start.”
Explanations were scant, but in the end the revenue projected by selling leafy vegetables evidently did not cover upfront and operating costs.
To be sure, there are smaller hydroponic operations that appear successful in the United States and elsewhere, usually serving niche markets, such as local restauranteurs. But, in general, hydroponic ventures are challenged by high costs of installation and operation.
Of course, there are older technologies that can reduce water use in farming, most notably “drip irrigation” systems pioneered by Australia and Israel in the 1960s, and widely adopted thereafter. Generally, in drip irrigation, plastic pipes emit small amounts of water and sometimes fertilizer (called “fertigation”) directly onto root zones of crops and trees, through emitters embedded in the piping. Some drip systems are even installed underground, as in almond groves.
Even a string of dry years in the farmlands of North America, Europe and China does not necessarily a make a new global norm. Yet, record-high temperatures are undeniable, and drought and floods may be on the menu in growing portions in decades ahead.
The advent of hydroponics and aquaponics is heartening and may offer many niche business opportunities. But even the relative success of urban farming is not likely to result in tangible shifting of either urban or rural land values, or consumption patterns.
Demand for industrial buildings in the United States, even if cooling, has hardly resulted in cheap quarters for rent. Urban farming is too small a segment to alter the national warehouse picture, or that of any large metropolitan region.
Farmland values have been slowly rising in real terms for decades, and if food becomes relatively dear due to chronic droughts, it makes sense that rural farmland values will keep rising, especially well-watered agricultural properties close to market.
Indeed, the Land Values 2022 Summary report, recently released by USDA’s National Agricultural Statistics Service, shows agricultural land values increased by $420 an acre in 2022 over 2021, the largest numerical increase since the survey first began in 1997 and the largest percent increase, at 12 percent, since 2006.
Droughts and floods are increasing farm values, at least judging from recent results.
Despite challenges, some governments, such as Singapore’s or the United Arab Emirates, may decide the food security is worth the price of subsidized farm products. To date, hydroponic facilities often cater to restaurants or other high-end outlets willing to pay more for greater freshness and flavor.
Perhaps, as more experience is gained and better technologies are introduced, eventually hydroponics and aquaponics will mature and be able to go toe-to-toe with traditional farming in the marketplace.
After all, electric vehicles were something of a novelty for decades, before eventually cracking mainstream consumer markets. If and when that happens for hydroponics and aquaponics, a reassessment of rural and urban land values may be forthcoming.
Benjamin Cole (email@example.com) is a freelance writer based in Thailand.