The Rise of Urban Agriculture? | Business Insights

The Globalization of the agriculture industry has driven major players to shift production centers to corners of the world with cheaper labor costs, an abundance of land and connected by a robust supply chain. This ultimately benefits the consumers, as large conglomerates can drive down prices with scale displacing smaller farms. While this might be the ideal outcome for any free-market economy, this method does not fare well under the faceless enemy “COVID-19”. The COVID-19 virus has brought about an unprecedented financial meltdown and disruption in our daily lives. While food production is deemed as essential, the industry is not immune to the recession. The core problem lies in the disruption of supply chains that are involved in matching supply with demand. The food supply chain is highly dependent on the aviation industry, where commercial liners are responsible for ferrying highly perishable goods. With no travellers, commercial liners find it hard to justify the operation.

The disturbances in global supply chains have ushered in opportunities for urban farmers. These decentralized farms can serve their communities during this period as they are more resilient to supply chain disruption. With fears of food security lingering in the minds of disease-stricken communities, consumers are reminded of the importance of local producers. Furthermore, the crisis has also enabled many domestic farmers to penetrate the market as consumers frantically search for substitute products. It is in times like these, consumers can identify with urban farms, instilling unprecedented brand loyalty. Relationships forged under times of adversity are undoubtedly deeper than an appealing logo. The amplifying effects of digital platforms have also hastened the market acceptance of the concept.

Apart from the aviation industry, the retail and tourism sector are also badly affected due to COVID-19. With the market sentiments on the declines, the unemployment rates are likely to increase. Akin to the 2008 financial crisis, many have observed an increase in self-employment after the recession. With the saturation of the gig economy, newly-minted entrepreneurs are more likely to venture into the agriculture industry. This is also partly driven by consumer demands in aspects of food safety, traceability, and food security. The assimilation of tech-based solutions in the arena of monitoring and control has also been a popular trend for new agri-related businesses. Apart from technology, the agriculture sectors are also likely to benefit from the cross-industry practices in domains like branding, business strategies, and supply chain innovation. As the market continues to realize the importance of domestic producers, urban farms will likely continue to grow.

As governments are focusing their efforts in the healthcare sectors, there are also many unsung heroes working behind the scene to ensure food security. Typical strategies employed include ensuring continuity in the supply chain, diversifying imports and boosting domestic production. Given the rapid transmission nature of the COVID-19, a boost in the domestic producers remains a hard strategy to execute given the short time frame. As a result, we might see changes in government policies in a post-COVID-19 environment to strengthen local food production. This is evident in Singapore, where policies are favoring the businesses in local food production. While it remains unclear whether governments are likely to employ protectionism policies, a pro-consumer approach is likely to be adopted.

While the government, consumers and businesses are still having their hands full in overcoming the crisis, the topic of food resilience will continue to be discussed in the post-COVID-19 environment.

#urbanfarming #indoorfarming #aquaculture #verticalfarming #agribusiness

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