Climate change continues to wreak havoc on farm and agriculture businesses. With increasingly unpredictable weather, destructive storms, and a decrease in natural resources, the farm & ag industry is scrambling to find a more reliable way to farm– one that would protect the industry from a quickly changing world.
Like most industries, technology holds great promise for farming and agribusiness, and in turn, for farm & ag insurers. While no technology can control the weather, predictive modeling, data management and a little creativity can help create controlled environments, mitigating some of the risks brought by the changing environment. New farming techniques, like vertical farming, hold great potential for the future.
Vertical Farming: A Growing Trend
Vertical farmers cultivate vertically stacked crops, utilizing different combinations of hydroponic, aeroponic, and aquaponic technology to create optimal environments and conditions. Such technology allows farmers to monitor light, moisture, CO2, and plant nutrition, adjusting levels as needed to optimize growth. When farmers don’t have to worry about the weather forecast or season, they can harvest crops year-round, providing a steady, reliable stream of lettuce, kale and other leafy greens. For example, one acre of vertical farmland can produce 4-6 standard acres’ worth of produce. This helps to solve for fresh-food shortages as the world becomes increasingly more crowded and space for crops is at a premium.
Vertical farming has seen great results on a smaller scale. While creating these controlled environments is more expensive compared to planting outdoors, it prevents losses both to farmers and insurers. Farmers who invest in this new technology can reap significant benefits for their businesses and the customers they serve.
The Future of Farm and Ag
The future of traditional farmland is unknown. As attempts are made to natural resources like water, states sacrifice fertile land used to produce the nation’s food. Urban communities are concerned about meeting the needs of growing populations. The adoption of urban farming helps cities produce products typically transported across the country, lessening the burden of fresh food instability in larger cities.
The urgent need for urban farming has never been clearer than during the COVID-19 crisis. Factory shutdowns and quarantines have resulted in a lack of food in places without access to nearby farmland. Urban farming could help remedy this issue and should be considered as the United States plans for future catastrophic events.
Urban farming will not only decrease the need for long haul transportation and transportation insurance, but the overall cost of insuring transported crops as well. Vertical and urban farming technology also provide more protection from natural disasters, decreasing the risk and coverages needed. With high-value products like wine being insured from the vine to the glass, the need for more extensive coverage would decline due to the dependable rate at which vertical farming harvests produce.
Modern Insurance Solutions
As the modern advisory alternative, AAIS is working with Farm & Ag Member carriers to update our product offerings, supporting new technology like vertical farming. Technology like openIDL could also contribute to growth in this space, opening the door to increased data sharing, analysis and cooperation across the industry.