Agriculture | Indoor Industrial Farms: Are They Set To Overtake Traditional Farming?

For the longest time, European food security has been a backseat issue for both politicians and the general public.

Even today, many maintain the belief that, regardless of the circumstances, food will always be available on the shelves — albeit largely unaffordable.

It's created a false sense of security that's led to a general stagnation in the field, with people – even scientists – no longer regarding agriculture as a priority for innovation, despite global rates of hunger and starvation either stagnating or, in some regions, reversing previous gains. 

To give you some scale of the problem, according to one UN report from 2023, around 2.33 billion people worldwide faced moderate or severe food insecurity. That's around 25% of the global population – an astonishing figure that is unlikely to be addressed without radical change.

Now, before the comments and tweets (is it still tweets? X’s doesn’t seem right) start flying in, I don’t mean the development of new agricultural machines and resilient GMO seeds; I mean a fundamental rethink about how we approach food production. After all, traditional farming, when considered objectively, doesn’t seem particularly logical given the level of modern technology at our disposal.

Farmers in the UK alone spend billions on input costs and new technologies – investments that are all too easily undone by cruel weather gods who, on a whim, can bring floods, droughts, and pests.

This was the case even before global warming became as pronounced as it is today, meaning it has gone from a problem to a ticking time bomb.

One study in 2021 found that grain yields decline by at least 10% each day during anthesis (the crop’s flowering phase) when temperatures exceed 32 °C. Given how close that threshold is to what is becoming the new normal for European summers, you can see the potential for calamity.

But it's not just environmental issues affecting the agricultural sector. Over the past decade, the industry has faced an unrelenting cycle of market turmoil — Brexit, Covid-19, the war in Ukraine, and Trump's tariffs, to name but a few.

And it's led me, in my quieter moments, to ask myself quite a horrific question: could the world actually survive one or more really bad growing seasons? The conclusion I came to is probably not.

You see, in traditional field farming, if the weather is bad, that's it – there are no do-overs. The crop fails, and you can only hope the next season is favourable enough to avoid bankruptcy.

It’s a gamble that requires a substantial investment of money, but more importantly, time. Just how long something takes to grow is a key area of disconnect between farmers and everyone else. To put things in perspective, even a relatively quick-growing spring-sown cereal can take between 4 and 6 months from planting to harvest.

That unavoidable waiting game is also one of the biggest failure points in food production. You see, all crops are planted and harvested around the same time, so, generally speaking, a specific pest or weather event that hits one field is going to hit them all.

So, if in the next decade global warming worsens and most of Europe's spring cereal fields fail, what then? What do we actually do? 

Yes, there are grain reserves, but what happens if this becomes the ‘new normal’? How do we feed the people on this planet with crops that can no longer grow effectively in the environment?

Well, the solution, as much as I hate to say it, may be to transition our food supply to the types of indoor industrial farming complexes that are cropping up all over the continent.

Indoor Industrial Farms: What Are They & How Do They Work? 

Indoor industrial farms undoubtedly represent the cutting edge of agricultural technology today, marking a wholesale departure from the traditional farming model — which has long depended on the unpredictable nature of open fields — in favour of controllable environments engineered for maximum productivity.

These systems all but eliminate the risk of a failed or diminished crop by deploying a blend of advanced sensors, automated controls, and data analytics to monitor and regulate temperature, humidity, CO₂ levels, and lighting. In doing so, they create a microcosm in which every element — from water quality to nutrient delivery — is fine-tuned to meet the specific needs of the plants, resulting in optimal year-round crop cultivation that would be impossible to replicate in an outdoor field.

Now, the technology isn’t new — it’s been in development for decades, which is why there is such a variety of approaches to solving the different agricultural problems encountered around the world.

Vertical farming, for example, stacks layers of crops in a controlled indoor environment using a multi-storey design that combines targeted lighting and nutrient delivery systems to maximise space and yield. This means the system can work effectively in urban centres or countries with limited available land, such as Singapore.

Hydroponic systems replace traditional soil with nutrient-rich water solutions, allowing effective agriculture in water-scarce regions. 

Aquaponic systems merge hydroponics with aquaculture by leveraging the natural fertilising properties of fish waste. The waste nourishes the plants, which in turn filter and purify the water for the fish in a sustainable, closed-loop system, ensuring that farmers – particularly in poorer countries – do not face issues arising from a shortage of affordable fertilisers.

Perhaps more importantly, this updated approach to farming is well placed to exploit emerging innovations such as AI-driven monitoring and robotic maintenance, raising the ceiling for the potential efficiency, sustainability, and profitability of agriculture going forward.

The Switch To Indoor Industrial Farming: What Are The Other Benefits?

One of the key benefits of relocating food production indoors is that vast tracts of arable land could then be repurposed. What form that takes would depend on the needs and wants of the populace. The land could be transformed into housing developments, rewilded to restore ecosystems and soil health (an issue in its own right), or, more likely, be used in a hybrid approach that seeks the best of both worlds.

This shift also reduces the carbon footprint associated with transporting food, both domestically (since these farms are set up in urban centres) and globally (as crops that would ordinarily have to be imported can be grown in the destination country).

Indoor farms also harness advanced technologies such as LED lighting, precision nutrient controls, and automated systems to optimise resource use, which in turn translates into lower input costs that should, in theory, make produce more affordable.

Moreover, the controlled environment in these farms creates a more resilient supply chain and enhanced food security by mitigating the effects of weather-related disruptions and reducing dependency on imported produce, which is now more than ever subject to the whims of global affairs.

Indoor Industrial Farming: What Are The Barriers & Challenges To Wide-Scale Adoption

The most critical barrier for the technology is a lack of investment and, frankly, awareness. It's undeniable that the start‐up costs for these sites begin in the tens of millions. It is an industrial undertaking on par with building a new factory and, in some ways, contrary to how agriculture is conducted in Europe, where 93% of agricultural holdings are smallholdings (family‐run operations) and only 7% are industrial. 

As such, it's not one of those industries that typically attracts investment at a corporate level, as it doesn't offer the profit margins of sectors such as property and tech. Consequently, the only way this is likely to be addressed is if governments start building their own sites or provide financial incentives for companies to do so.

Another key issue, particularly in Western Europe, where this industry is most likely to begin, is the extraordinarily high price of energy, as these farms, by their nature, require substantial energy inputs for internal systems such as LED lighting, climate controls and automated machinery.

The reliance on continuous energy inputs exposes indoor farms to shifting energy prices and may raise sustainability concerns if the electricity is generated from non-renewable sources.

Additionally, the controlled environmental biomes of these farms can only be optimised for one crop at a time, meaning there is a limit to the variety of produce they can support. This, in turn, poses a risk to the economic viability of these sites, as they are susceptible to fluctuations in market prices.

Although the technology has matured over the last decade, there is still some way to go. The systems currently in use still struggle to replicate natural pollination mechanisms and support the development of deep, extensive root structures for both practical and economic reasons.

Perhaps the biggest challenge is the economic and societal changes that rural areas would face as a result of updating agricultural practices. Yes, it would be more productive; yes, the food supply would be cheaper and more secure. 

However, the people employed at these new sites will, on the whole, have to be university‐educated specialists owing to the complexity of the endeavour. This will create a barrier for traditional farmers, whose specialised knowledge in conventional methods does not readily translate. It is a change that would reshape rural employment and the economic landscape – and probably not for the better.

So, Where Is The Technology Today & Where Is It Heading?

The indoor farming sector, by all accounts, is set for rapid growth and expansion. It was valued at $37.9 billion in 2023 and is expected to grow to around $108.6 billion by 2035.

What this means in terms of global agricultural output is a bit tricky to project, as the technology is likely to gain significant market prominence only in developed countries with high populations and limited land areas – such as the UK and other Western European nations – where the factors align with the need. Broadly speaking, experts estimate that indoor farming will account for around 10–15 per cent of the UK's agricultural output by the end of the next decade.

Developments such as AI are likely to accelerate that timetable, along with the (perhaps overly) ambitious net-zero goal, which would necessitate a transition away from high-carbon-footprint food imports.

This should be caveated by the boom-and-bust nature of the sector, where over-ambitious companies often struggle to scale up effectively — as seen this week with the collapse of The Jones Food Company, owners of the most advanced indoor farms in the UK, following their failure to secure further investment. This is juxtaposed with the fact that in the very same week, the Italian indoor farm tech company Planet Farms announced the single biggest investment in UK vertical farming: over £25 million to build a new facility.

Now, this may seem ludicrous (and it is), but this market movement is currently the norm and suggests that while the market clearly has demand, moderate capital, and sufficient technology, there remains a lack of industry experience — at least for now. It's a bit like the early days of social media, when platforms rose and fell before generally stabilising—remember MySpace?

The TLDR: Are Indoor Industrial Farms Set To Overtake Traditional Farming? 

The short answer is yes. The key questions now are: how long will the transition take, and what role might traditional farming play in the future?

It seems most likely that a complete transition — one that entirely supplants traditional farming — will not occur within a decade but rather by the end of the century. Even then, we are likely to see a hybridised approach, with traditional farming retaining a market presence similar to that of organic food today. This slow shift will hopefully facilitate a smooth transformation of the rural economy into other sectors.

What is undeniably true is that change is desperately needed. World hunger remains too high, and food security too low. In many ways, this transformation cannot come soon enough.

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