Urban farming: Is it financially and spatially feasible?

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Technically, urban farming refers to the practice of growing food in urban areas to generate profit, but does it make financial and spatial sense?

Considerations in urban areas

The urban farmer has some key issues to consider with regards to land, water, soil, infrastructure, and marketing opportunities. Land is often the limiting factor.

What distinguishes urban farming from traditional farming practices, is that the idea of urban farming is often sold on a lesser need for land. Different types of land can be used, such as residential yards, urban spaces such as rooftops or parking lots, space on institutional land and vacant lots. Small portions of land tend to be more affordable and accessible but tend to limit the scalability of the enterprise.

While this may be feasible for a small family practicing subsistence farming, the production of large, marketable quantities of produce inevitably requires more space. Large open spaces in urban areas are both scarce and expensive, and most farming businesses do not justify the cost of acquiring large portions of land.

Urban farming can be done using a range of different processes, of which SPIN (small plot intensive) and hydroponic systems have become the most popular.

SPIN farming

Small plot intensive farming makes use of underutilised pieces of land in an urban area, to plant and harvest fresh produce with the intention of generating profit. This process makes use of soil as the planting medium and accommodates a range of fruits and vegetables. Soil and water quality are important production factors for the SPIN farmer.

SPIN farmers invest in improving the quality and fertility of the soil present on their land. SPIN farming depends on land and although there are some success stories of SPIN farms feeding families and small communities, these farms are generally not suited to becoming full-time businesses – they are difficult to profitably scale to high output levels.

Hydroponics

In contrast to SPIN farming, hydroponics is a system in which crops are grown in sand, gravel or liquid using water-soluble nutrients and no soil. This is a closed system and excess nutrients can be collected and reused. As hydroponic systems do not make use of soil, good water quality is essential.

Hydroponic systems are typically inside some form of structure and often in vertical layers commonly known as vertical farming. Leafy greens, bell peppers and cucumbers are common hydroponic crops.

Hydroponic systems are known for their efficient water use. In addition, the ability to farm multiple layers on the same surface area, allows hydroponic farmers to harvest higher volumes on the same space compared to a SPIN farmer. Hydroponic farms do, however, have a higher start-up cost than SPIN farms, but are easier to scale and generally more efficient.

Both systems require fixed investments, thus complicating both scaling and relocating the enterprise. Urban farmers face higher susceptibility to theft and vandalism, so careful attention must be given to security measures.

Easy market access

The main advantage of urban farming is potential market access. Urban farms are located in closer proximity to the consumer, significantly decreasing travel costs and often cutting out the middleman. Consumers are becoming increasingly aware of intangible product attributes such as carbon and water footprints, organic and environmentally friendly practices, locally produced and handpicked products.

In some urban areas consumers that value these intangible product attributes, are more concentrated. Urban farmers have the opportunity of entering niche markets with their produce. In higher income urban areas, restaurants and supermarkets tend to promote local and environmentally friendly produce and sell it at a premium.

Some of the marketing models that have been explored by urban farmers include farm-gate purchases, subscription, delivery, wholesale, and retail. They are therefore able to adapt to the specific needs of niche markets. Urban farmers need to secure markets effectively and must be able to maintain production volumes to meet the demand. Farmers are highly dependent on building and maintaining relationships with consumers in their area.

Land size

While urban farming is often praised for using small portions of land, it seems there are different meanings attached to the term. 'Urban farming' can be successful in converting extra yard space into modified vegetable gardens. In the Cape Flats alone, there are more than 6,000 of these 'urban farms'. These families use small portions of land for subsistence farming and are able to trade the surplus at the market or with other community members.

There are many successful subsistence farmers making use of these systems in other urban areas. Some SPIN farms in North America have been reporting sales of $50.000 per annum on a mere 0,4ha (4,000m2).

These systems are all referred to as successful urban farming. However, the technical definition for urban farming is the production of food in urban areas to generate profit; in other words, it is a business. Going by this strict definition, it becomes increasingly more challenging to be a successful urban farmer.

Land remains the limiting factor. SPIN farming enterprises, in particular, struggle to justify the cost of land. This is clearly demonstrated in Table 1. Hydroponics show promising potential in the urban production of fresh produce based on its efficient use of water, space, and energy.

The cost and availability of land vary greatly among South African urban areas. In areas where marketing opportunities are most concentrated, land is scarcer and meeting demand becomes more challenging. Start-up and operational costs will vary significantly based on the location of the farm can be very high, requiring large volumes and/or higher sales prices to be financially sustainable in the long run.

Food for thought

Urban farming has been growing in popularity, whatever the definition. Although ‘urban farming’ as it is loosely referred to has proven to be beneficial and successful in the non-profitable addressing of social issues and even in the backyards of some urban agricultural enthusiasts, experts do not see it becoming a booming business model taking over the traditional fresh produce market in South Africa anytime soon.