What is Controlled-Environment Agriculture?
Controlled-Environment Agriculture (“CEA”) is technology-based food production systems which are conducted in enclosed structures, typically cooled or heated greenhouses. CEA production methods enable commercial producers to maximize profits because they support year round harvests of local and exotic crops. Unlike traditional food production methods, CEA production methods are not limited by usual climatic factors like temperature, humidity, and light availability. Plants are grown using Aquaponics or Hydroponic methods to supply optimal amounts of water and nutrients to roots. Because CEA is a technology enabled food production method, computer based testing and sensors optimize the use of resources including water, area, energy, labor, and capital.
For example, in February 2011 an article in the magazine Science Illustrated reported that, "in commercial agriculture, CEA can increase efficiency, reduce pests and diseases, and save resources.” Replicating a conventional farm with computers and LED lights is expensive but proves cost-efficient in the long run by producing up to 350 times as much organic, high-end, pesticide-free, and chemical-free produce compared to a similar-size area of soil. Since 2011, there have been tremendous commercial advancements in CEA technology which have reduced the cost for digitization and mechanization by 60-80%.
Overview of CEA Industry
The CEA industry is broken into three main sub-industries:
Hydroponics: The growing of plants in a soil-less medium, or an aquatic based environment using synthetic or mineral based nutrients
Aquaculture : The rearing of aquatic animals or the cultivation of aquatic plants for food
Aquaponics: Combines hydroponics with aquaculture. Instead of artificial nutrients, recirculating Aquaponic systems derive nutrients from fish waste. In the presence of nitrogen fixing bacteria, waste is converted into useful nutrients which plants uptake, cleaning the water that circulates back to the fish.
While CEA technology has been around for decades, the CEA industry is nascent and has only witnessed full-scale commercial production in the past five years. Until recently, the lack of government and economic incentivization, scientific awareness, and general risk aversion have created strong headwinds to industry expansion. Recent changes in government and economic policy, combined with increased awareness have supported industry expansion. Based on current rates of food inflation, global resource constraints, and the lack of nutrient dense food supply in key developing markets, VMD Research estimates the CEA industry to grow at a CAGR of 9-12% through 2030.
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