Introduction

Rapid urbanization that is happening today goes hand in hand with rapid increase in urban poverty and food insecurity. By 2020, the developing countries of Africa, Asia, and Latin America will be home to some 75% of urban dwellers and to eight out of nine anticipated mega-cities with populations in excess of 20 million.

To manage the agricultural supply chain products as they move, value chain participants need a secure, transparent, trustworthy platform and marketplace. Agro chain management build networks amongst key stakeholders and improves delivery, while reducing costs and inefficiencies.

VFarm believes that urban vertical farming is the solution to the major concerns above. The idea of building vertically-stacked farms on skyscrapers that produce crops twice as fast, while using 40% less power, having 80% less food waste, and using 99% less water than outdoor fields is definitely the way forward.



The vertical farming market was valued at USD 1.5 billion in 2016 and is expected to register a CAGR of 23.03% during the forecast period (2018-2023). Asia-Pacific is the biggest and the leading region in using vertical farming in present times, closely followed by Europe and North America. Though North America and Europe have most farms to use innovative technologies in the field of agriculture, Asia-Pacific region has many investors interested in exploring the vertical farming opportunities, with increasing concerns over food safety due to the constantly growing population in the region. Farmland shortage, population growth, and demand for pesticide residue free food are the main key drivers for the emergence of vertical farming.

VFarm - "Revolutionizing Urban Agriculture"

VFarm system is a proven, research backed urban farming technology licensed by Agrosky Sdn. Bhd (ASSB), a vertical farming specialist. The system provides a DLT blockchain layer that creates an immutable record for each batch of produce as to enable verification of source, planting, packaging and distribution. This in turn enables ecosystem users to not only have total traceability of the produce on food safety but also drive social impact via informed choices on their purchases.

VFarm's economic model is based upon Social Enterprise (SE) in line with The United Nations Sustainable Development Goal (SDG). SE are the future of development because it is able to solve some of the development problems that neither donors nor government have been able to solve. These are innovations that involve behaviour change and therefore need to harness all of the energy present at the Base of Population (BOP).

Empower population at BOP including women as urban farmers to be part of the urban farmer's community.

VFarm believes that a community-driven ecosystem that fosters entrepreneurship, fuelled by high- quality content and rewards and hosted on a blockchain- based platform is the solution.

Though vertical farms can never be expected to replace traditional farms, it is likely that they will have to complement each other to meet the food demands of tomorrow. It is economically sensible, environmentally friendly, tech-savvy, and most importantly, health-sensitive. Vertical farming is not a fairy tale anymore, it is happening now!

Issue

The world population is moving to urban areas at an increasingly rapid pace and with it comes food shortages and water shortages, disease and income disparity. From 2020- 2025, dense urban cities worldwide will house more than 4.5 billion people and current agricultural practices can only provide for 30% of the required produce. Such rapid urbanization and the harsh reality of urban poverty require ad hoc strategies to ensure adequate food supply and distribution systems to address escalating levels of urban food insecurity. Besides the growing demand for food, there is a rapid increase of poverty, unemployment, hunger and malnutrition in the urban and peri-urban environment around the world. Within this reality, urban agriculture has become a key component of the survival strategies of poorer sections of the population while also providing a significant contribution to the urban fresh food supply chain. Urban agriculture is also a source of employment and income, and has the potential to improve the nutrition of disadvantaged urban residents.

Solution

There is a pressing and urgent need to provide these increased masses with sustainable food. The technology that provides an answer to this problem will be at the epicentre of a USD$317 billion agricultural revolution.

And the answer is a high-density vertical farming system capable of producing 360 times per square foot more produce than conventional farming and is capable of producing plants for food, cosmetics and medicine. The system also needs to be capable of quick deployment to any city in the world.

Ecosystem users can see the environmental (water usage, carbon footprint, nutrient use) impact and socio-economic inclusivity (impact of their purchase decisions). VFarm aims to revolutionize urban farming by licensing VFarm System module globally.

VFarm system can be applied for the planting, production and distribution of plants for the use on food, cosmetics and medical purposes.

VFarm fundament markets of Kuala Lumpur & London comes with the collaboration from it’s stakeholders for the use of stakeholder which owns A-List buildings in the golden triangle of Kuala Lumpur and Central London.

VFarm – "Penetrates the Urban Market"

With the combination of high demands of fresh produce and dearth of suitable urban farming land in the middle of an emerging urban cities like Kuala Lumpur, roofs are increasingly being seen as a plausible space for growing food and a proactive measure in building a sustainable future for cities. Indeed, an abundance of unused rooftop spaces prevails. The location of these rooftops can be carefully chosen for its strategic location, enabling direct tangible connections between farmers and consumers, as the crops will be delivered fresh in an unprecedented time. Besides the communal economic effect, converting rooftops into green roofs has become a rising trend in emerging urban areas around the world, that aims to "scale up" urban agriculture, as well as supplanting inorganic, lifeless roofs with vibrant greenery cityscapes and balance an otherwise bleak horizon of concrete and tar.

In a seamless agriculture production ecosystem, agriculture value chain participants need a secure, transparent, trustworthy platform and a democratic marketplace while the viability of urban agriculture is closely related to its contributions to the development of a sustainable and a resilient city that is socially inclusive, food secure, highly productive and environmentally healthy. A sustainable, secure and transparent agriculture practices are indeed one of the most imperative pillars for the survival of humanity.

With the spirit of human building as our principal guideline, VFarm was initiated to spur the growth of social economic equity through sustainable ideas and projects. By collaborating with relevant stakeholders and strategic technology partners in providing the elements needed (Technology, Construction, Blockchain, Internet of Things (IoT), Branding), we aspire to create a world class human capital growth through our social enterprise economic model.

VFarm recognizes that our economic module is to remain profitable. Without turning a profit, the business wouldn’t sustain and any potential impact would be severely hampered. Nevertheless, we have much bigger goals than revenue and profit, as making a positive impact is an imperative. Our founders are committed in combating social economic inequality by combining social responsibility with entrepreneurship to spur the growth of social economic equity. This has been proven through our economic module as it covers 14 of 17 UNDP Sustainable Development Goals related to agriculture.

VFarm is based on a revolutionary, patented agricultural technology with innovative IoT devices to facilitate the curated growth of crops. VFarm farming technology have been researched, tested, and prototyped by prolific national research institute in 2014, through a "Crop Factory' incorporated with latest vertical farming and green technologies (such as LEDs, NFT hydroponic system, automated irrigation, and fertigation system, Etc), designed to meet the MyGAP (Malaysia Good Agricultural Practices), GMP (Good Manufacturing Practice) and HACCP (Hazard Analysis and Critical Control Point) specifications and requirements.

VFarm eco-system covers the entire supply chain processes. VFarm DLT blockchain layer makes an immutable record for each batch of produce as to enable verification of source of kernel, planting curation and transport conditions. In our farm, latest vertical farming technology such as the highly efficient LED lighting system with adjustable colour spectrum and lighting power to boosts sugar accumulation in plants giving them more energy to grow is applied. Temperature, irrigation, and nutrient balance are also automatically adjusted for each specific plant variety to allow for the average crop yield with VFarm is higher compared to a greenhouse or the traditional outdoor cultivation. The built-in nutrient solution unit controls and manages the allocation of nutrient elements, while the biofilter nourishes the solution with beneficial bacteria. Through this eco-system it helps to improvise time markets, while reducing agriculture value chain costs and inefficiencies.

VFarm has commenced the build on our first farm in the golden triangle of Kuala Lumpur in May 2019, and is expected to yield the first batch of crops by the end of July 2019. The first farm is designed to produce 20 tonnes of crops monthly which will be marketed through contract farming.

Urban poverty tends to be fuelled by people migrating towards the cities in an attempt to escape the deprivations associated with rural livelihoods. Partly due to the rural decline, the world is urbanizing at a fast pace and it will not be long before a greater part of developing country populations is living in large cities. Therefore, urban food security and its related problems should also be placed high on the agenda in the years to come.”

Jacques Diouf,
FAO Director-General

Market

Pain Point

Half of the world's population will be living in cities. These will continue to be the main centres of growth, expecting to house almost 5 billion people in 2030. While megacities with a population over 10 million will likely continue to grow in size and numbers, most of the increase is expected to be absorbed by small less than 500 000 and intermediate 1 to 5 million cities.

Food Security

A confluence of factors affect food security in urban areas. Rapid urban migration of more than 60% of the population by 2025 and a shrinking workforce in the agriculture sector due to an ageing farmer population leads to a situation where only 30% of crop requirements can be met by current agricultural practices. Crops plays a significant role in human nutrition, especially as sources of vitamins, minerals, dietary fiber and phytochemicals. Low vegetable intake, in unbalanced diets, has been estimated to cause about 31% of ischaemic heart disease and 11% of stroke worldwide.

Enviromental Issue

Environmental issues, such as scarcity, degradation and contamination of land, water and forest resources generated by poorly planned urbanization are coming to the forefront. The risk of disasters increases with significant numbers of predominantly poor populations exposed to floods and landslides.

Livelihoods & Socio Economic Gaps

While there are certainly more foods available year round and more jobs and social services in urban areas, not everyone is able to benefit. A growing number of urban poor face a daily struggle to feed their families. Poverty and unemployment are often associated with social exclusion. This means that many poor people have neither physical nor economic access to adequate and safe foods, nor to the facilities required to store and prepare them.

Nutritional Wellbeing

Nutritional wellbeing and people who move to cities must adopt new methods of acquiring, preparing and eating food. Many city-dwellers have limited time for shopping and cooking and they rely ever more on processed and convenience foods, including street foods. Poor shelter, lack of sanitation and hygiene and insufficient social services in slum areas further compound the problems of the poor. As a result, under nutrition and micronutrient deficiencies, coupled with over nutrition and rising problems of obesity and diet related chronic diseases can be found in most cities. This situation is further exacerbated by low levels of physical activity.

Market

Opportunities

The world urban population is expected to double leading to a growing number of urban poor. The urban population expansion is more pronounced in developing countries as result of the immigration from rural areas, as people flock to the cities in search of food, employment and security. The trend is accelerating, and by the year 2030, it is expected that about 60% of the world’s population will be living in cities. Such rapid urbanization and the harsh reality of urban poverty require ad hoc strategies to ensure adequate food supply and distribution systems to address escalating levels of urban food insecurity. Besides the growing demand for food, there is a rapid increase of poverty, unemployment, hunger and malnutrition in the urban and peri-urban environment around the world - issues that are of great concern to central and municipal authorities.

Within this reality, urban agriculture has become a key component of the survival strategies of poorer sections of the population while also providing a significant contribution to the urban fresh food supply chain. Urban agriculture is also a source of employment and income, and has the potential to improve the nutrition of disadvantaged urban residents.

Water use and reuse for urban agriculture

Water use has been growing at more than twice the rate of the population increase during the last century. In rapid growing urban centres, water has become a fragile and scarce resource in a competing environment. In marginal zones of megacities, often characterized by a high incidence of poverty, many people practice agriculture on a very small scale to satisfy their basic food needs. With placing demands on water allocation to support urban communities’ livelihoods, agriculture has respectively grown with urban irrigation mainly as an “informal” activity practiced by individuals and farmers’ associations.

Localized sources of water, which include groundwater, streams, urban drains, piped water and (un)treated wastewater, in urban centres of low to medium-income nations are likely to be severely contaminated due to the concentration of habitation with rudimentary sanitation arrangements and unregulated municipal and industrial effluents. Management of water resources has become an urgent issue as urban farmers often apply water from municipal sewage, mostly in its untreated form, to irrigate and for plant nutrients, thereby increasing the risk for illnesses to both the farmers and the consumers. Furthermore, the destruction of shallow riverine and coastal aquifers, through over-pumping and pollution, has greatly added to the water crisis in many cities.

Urban food market infrastructure and services

To achieve cost effective food marketing, minimize post harvest losses, reduce health risks and ensure an adequate stability of basic food supply to cities, efficient market infrastructure such as assembly, wholesale and retail markets, storage facilities, as well as basic handling and transport facilities and services, are essential. Market infrastructure, facilities and services, equipped with new technology, such as refrigerated logistics and storage and information systems that track inventories, should be planned at the regional, metropolitan and urban levels.

Such factors include:

  • market failures;
  • poorly developed urban food systems;
  • the absence of market transparency;
  • a lack of scale economies along the distribution system; and
  • high transport costs and high physical losses at all levels of distribution
Urban food marketing

As cities grow in population and area they require more extensive infrastructure and enhanced rural urban linkages and marketing arrangements to bring increasing quantities of food to consumers. In reaching urban consumers, food passes through a variety of marketing and organizational systems and in many developing countries, several factors generate additional costs and raise consumer prices.

Food security concerns are especially important in cities in developing countries where urban poverty rates often exceed 50 percent. The cost at which poor urban households access adequate food is determined not only by private sector activities and investments but also by the way the public sector – central and local governments – intervenes in the food marketing system and addresses constraints limiting the efficiency of activities.

Expanding urbanization leads to increased competition for land on the urban perimeter. This, combined with rapid urban population growth, has led to food supplies having to move over greater distances. Furthermore, increased food supplies have led to greater traffic congestion and pollution, and to stress being placed on the unimproved and overloaded food distribution systems and market infrastructure. New, improved and expanded marketing facilities are also required due to changing food consumption habits, an increased demand for convenience and processed foods and the greater concern for food quality and public health. For low-income families, decentralised food marketing facilities providing easy access to food supplies are essential, as the further the distance from markets, the higher the time and transport costs.

Fresh Foods

Growth of urban populations, changing consumer perceptions about food safety and quality, together with increases in urban income and purchasing power, have led to a shift away from consumption of staple carbohydrates and highly processed foods, towards a demand for higher value, fresh and minimally preserved foods (especially fruit and vegetables) which are perceived to be nutritionally superior.

This provides opportunities for improving supply chains for fresh produce, ensuring higher quality and safety for consumers, and better returns for producers. Fresh foods consumed by urban consumers come mostly from rural areas, and as cities expand, so does the length of the rural-urban supply chain.

Social Impact based consumption

Consumers are more attuned now to how the choices they make about the things they use will impact the world around them.

Giving consumer the ability to make informed decisions and choices about the produce they use creates affinity to the source and channel of consumption.

The social factors that can be tracked include:

  • Carbon footprint;
  • Water consumption;
  • Farmer's socioeconomic condition; and
  • Nutrient usage

Learn more

on VFarm by downloading the whitepaper
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