Growing competition for arable land and fresh water, the progressive degradation of existing farmland, rising labour, fuel and fertiliser costs and a looming worldwide food crisis make it crucial agribusinesses learn to produce ‘more food with less’.
One facility set to benefit from successfully tackling the food production challenges of the 21st century is South Australia-based Sundrop Farms.
The company began operating its first commercial greenhouse facility in 2010 on degraded, arid land abutting Spencer Gulf, just north of the city of Port Augusta.
Here, poor soil, lack of fresh water and a harsh climate make conventional outdoor horticulture unfeasible, but this is no hindrance to Sundrop Farms.
The company has been growing millions of ‘clean, green’ tomatoes, chillies, capsicums and cucumbers in a vast greenhouse complex in which “the three essentials for traditional farming – fresh water, farmland and fossil fuels – are no longer decision drivers”.
Under Sundrop’s proprietary system, crops are grown in soil-less nutrient-rich hydroponic solutions in high-tech greenhouses powered by sunlight, irrigated with desalinated seawater, and shielded from pests, diseases and climatic extremes so no pesticides or herbicides are needed.
In December 2014, the company began a significant expansion of its existing greenhouse operations. Once the newly-completed 20-hectare complex ramps up to full production later in 2016, it’s set to be one of the nation’s most productive tomato-growing facilities.
Reliable production and low risk make Sundrop’s system a safe bet
Typically, private equity is wary of investing in horticultural enterprises thanks to the high level of uncertainty – hence, risk – involved, due to unpredictable environmental factors such as temperature, rainfall, pests and diseases.
These risks don’t apply to protected-cropping enterprises, which gives companies like NSW-based tomato-grower Costa LINK TO AGINN CASE STUDY and more recently, Sundrop Farms, the edge when it comes to securing big contracts and investment funding.
The capacity to supply large quantities of naturally grown, premium fresh produce consistently, year-round, at an agreeable fixed price is likely a big reason why, in 2015, national supermarket chain Coles signed a 10-year contract with Sundrop Farms to supply fresh tomatoes to its retail stores.
It was the first time the Wes Farmers-owned company had signed a decade-long contract for Australian-grown produce.
Sundrop Farms’ self-sufficient protected-cropping system means it’s able to guarantee Coles a reliable supply of fresh, high-quality tomatoes at a fixed price, without the risk that drought, inclement weather, pests or pollutants will affect supply or that rising energy, water or pesticide costs will cut into its profits down the line.
It is also a reason the new venture has secured a $100 million expansion fund from international private equity firm KKR.
“This is an agricultural investment without the traditional risks,” explained KKR Australia Director Leigh Oliver.
Sundrop Farms is set to deliver its first truckloads of tomatoes to Coles supermarkets by mid-2016 or sooner.
Once its Port Augusta facility reaches full production, the farm’s output is expected to account for a whopping 20 percent of Australia’s hydroponic tomato market.
On an international scale, Sundrop Farms’ innovative vegetable production system, claims its makers, is suitable for adoption in any area with access to abundant sunlight and seawater – which means the system could be productively implemented across large parts of the Middle East, Spain, Portugal, the US, Africa and, of course, Australia.
Why the Sundrop Farms system is important
By 2050, experts predict a 50 percent increase in global food demand, while the available arable land per person will have been cut by half thanks to unsustainable farming practices.
Since the turn of the 21st century, climate change has resulted in more frequent ‘extreme weather’ events that can devastate field crops. Meanwhile, available arable land is being progressively degraded, while water scarcity, particularly in arid regions, is becoming more acute.
These challenges are making traditional outdoor horticulture an increasingly pricey – and risky – business. It’s a big reason that the market for fruit and veg grown in protected-cropping facilities has tripled since 2000.
Growing food in greenhouses minimises environmental risks, but facilities that rely on fossil fuel for heating and cooling, and ground or surface water for irrigation will prove increasingly costly to run.
This is where Sundrop Farms’ sustainable hydroponic system, powered by renewable energy and irrigated with purified seawater, has the edge.
Unlike typical greenhouses, which use groundwater for irrigation; fossil fuels for heating and cooling; and potentially harmful chemicals to control crop pests, weeds and diseases, the proprietary Sundrop System uses desalinated seawater and sunlight to meet the facility’s entire energy and water needs; naturally sourced, non-GM seeds; and “sustainably sourced” carbon dioxide (CO2) and nutrients “to encourage the best possible yield” from crops.
There’s no soil to cultivate, which reduces labour, equipment, fuel and fertiliser costs, and few weeds, pests or diseases to manage – meaning no costly chemicals needed to control them and no spraying equipment required. Instead, hand-weeding and integrated pest management methods such as introducing beneficial insects are employed, replacing the use of potentially harmful pesticides and herbicides.
More importantly, perhaps, the facility’s production is climate-proofed. “We can grow food year-round without worrying about weather, season or soil quality – even in places where a drop of rain hardly ever falls,” the company’s website states.
It’s a cost-effective system that could be used, potentially, to turn arid, degraded land worldwide into intensive, highly productive and fully self-sufficient food production zones.
Sundrop’s greenhouses can be sited virtually anywhere on Earth that has access to seawater and sunshine, and are suitable for growing a large variety of horticultural produce; including tomatoes, peppers, chilies and cucumbers, as well as a diverse selection of fruits.
Benefits of Sundrop’s growing system
The Sundrop System addresses several of the key challenges facing 21st-century food producers, including:
1. Conserving freshwater resources
Sundrop Farm’s system deploys desalination technology to produce, rather than consume fresh water, minimising dependence on finite reserves of ground and surface water and producing pure, distilled water that needs no chemical treatment.
2. Reducing demand for fossil fuels
Conventional greenhouse operations use large quantities of fossil fuel (principally grid electricity and diesel) to cool, heat and operate the facilities, whereas Sundrop’s greenhouse system draws on the sun’s power as its main energy source, utilising efficient solar thermal energy to generate electricity and control the greenhouse climate.
3. Slashing operating costs
The Sundrop System shields farm operating costs from the inherent volatility of water and energy prices. As we rely on abundant and renewable inputs, we not only protect consumers from price swings, but also improve our facility economics.
4. Minimising the need for pesticides
Sundrop Farm’s innovative protected cropping system utilises saltwater to ‘scrub’ the air that flows into the company’s greenhouses, minimising the need for pesticide application; and insects that have been found to control harmful pests in natural environments are introduced to the greenhouse facility, resulting in healthier, unsprayed produce.
5. Making productive use of marginal land
Sundrop’s system makes it feasible to use land that would otherwise be deemed unsuitable for agriculture or horticulture and turn it into what the company refers to as “a hub of concentrated production that will yield 15-30 times more produce per hectare than conventional field production”
6. Producing locally (meaning fewer ‘food miles’ and fresher produce)
With transport costs rising and consumers increasingly concerned about farming’s carbon footprint, systems able to produce food in closer proximity to end consumers rack up fewer ‘food miles’ (and accompanying transport costs) and deliver fresher produce.
7. Growing better fruit and vegetables
Sundrop Farm is convinced its growing methods benefit more than just the planet and the company’s bottom line: they also result in more nutritious, healthier and, arguably, tastier fruit and vegetables rich in vitamins, minerals and fibre, and low in fat and sodium, the company claims.
8. Creating green jobs in marginal areas
For every hectare of its greenhouse facilities, Sundrop Farms employs and trains between five and 10 people in current protected-cropping practices, helping create long-term ‘green’ employment in regions that may not otherwise be able to support a high-value horticultural industry.