25 May, 2021

Case Study: Farming Goes Vertical

As we explore the increasing trend of diversification on farms across Ireland, we spoke to Brian O'Reilly who converted one of his eight mushroom tunnels into Ireland’s first vertical farm.

It’s hard to imagine four more diverse locations than between the English seaside town of Paignton in Devon, the cities of Singapore and Munich, and the village of Ballyporeen in South Tipperary – yet they are all linked, having each played a key role in the evolution of vertical farming.

Paignton Zoo Environmental Park hosted the world’s first pilot production system in 2009, while Singapore took things a step further three years later as the company ‘Sky Greens Farms’ put in place the first-ever commercial vertical farm. Today, in one of the most densely populated areas of the planet, they have over 100 nine-metre towers engaged in food production.

In 2013 the Association for Vertical Farming (AFV) was formed in Munich, and then a year ago in Ballyporeen, Brian O’Reilly converted one of his eight mushroom tunnels into Ireland’s first vertical farm, with the assistance of Harmony, a vertical farming consultancy company based in Dublin.

It was probably inevitable that when this new and counter-intuitive approach to food production came to Irish shores, it would be someone like Brian who would take the leap of faith and put his shoulder behind it.

From his teenage years, when as a native of the Liberties in Dublin, he decided that he wanted to make his career in the farming world, defying convention has come naturally to the owner of ‘Harmony Premier’.

After serving his farm apprenticeship, pig farming and then mushroom growing offered Brian a means to make his livelihood in food production, despite not starting with a scraw of ground to his name.

Now, farming without much land has evolved into farming entirely without soil, as Harmony Premier uses hydroponic modules to grow basil, Brian’s first step into the vertical farming space.

“I grew chestnut mushrooms for 18 years, supplying Monaghan Mushrooms” he explains.

“Then they asked me to move to fast compost, which would have required a complete transformation of the way I did business, and because of the timing of when they asked for the change, I was not able to access any grant support to make the switch, and I took the decision to walk away”.

The man might be able to walk, but the equipment and the infrastructure were there on his three-acre farm, and it quickly became a question of how to use those assets.

“The wind turbine was there, the tunnels were there, and it just felt wrong to leave them all go idle. So, I investigated different options that were out there, and the more I found out, the more I was intrigued”.

Now, in an area of just over 15 metres squared, he produces roughly 150kg of basil micro trays per week. The plants are grown in water, which is electronically monitored and topped up with nutrients as required. LED lighting for 18 hours a day keeps the unit at a balmy 25 degrees, and the whole process from seed to harvest takes just 30 days, with no need for chemicals or pesticides. Perhaps counterintuitively, just 10% of the water needed to grow the same plant in the traditional fashion is required to grow basil hydroponically.

Globally, there has been a significant move towards vertical farming. In November, the Financial Times reported that over $1.8 billion had been invested in the sector globally, while the United States Department of Agriculture (USDA) has predicted that as the world’s population projects towards 9 billion by 2050, vertical farming will be a big part of the answer to feeding that number of people. There are a few hurdles to be cleared before that stage is reached, but even now, Brian is very encouraged by the early evidence.

“All we’re producing is currently going into pesto; right now, the service sector is closed. So, if we can sell in this environment, imagine what we could do when things are opened up?”

“Supermarkets and factory producers don’t want to pay any more than the imported price, so it’s a struggle to get that premium, but when the service industry is back up and running, they’re the ones that will be attracted by how it’s produced locally with no chemicals, and there’s no washing, drying or cutting off the ends and so less labour”.

Another advantage is that versatility and flexibility come with such a short turnaround time, so production to order is feasible.

“We’re looking carefully into microbreeding, I’m doing that for one customer at the moment. It’s a hotel that hopes to be open at the end of the year, and they’re looking at ways to get more clean, Irish, local produce in”.

Looking further down the road, and it may even be the case that locally-produced greens won’t just be desirable at the higher end of the market but vital to plug gaps on supermarket shelves for home users as well. Kenya supplies the majority of Ireland’s basil at the moment, but much of this comes through UK wholesalers and counts as part of the incredible €420 million worth of fruit and vegetables that come into the Irish market from our nearest neighbours every year.

As Brexit continues to bite and delays in movement reduce the viability of some of those imports, Brian believes that this new approach to production could be necessary and that more suppliers will soon come on stream. He was one of ten mushroom producers that opted out when Monaghan Mushrooms shifted the goalposts, and his progress is being closely watched.

“Four of them are looking over my shoulder, I’m the guinea pig going first, and they’re excited!” he says, expressing his hope that native producers aren’t forced out of the workplace by wafer-thin supermarket margins.

“The saddest thing is when someone is forced out of food production, and you lose the expertise and the experience that this person had. We’ve lost too many good people, people that have so much to contribute and who will be needed when it becomes more and more important to increase the range of foods that we produce here in Ireland”.

“16% of your income goes on food, and that’s too low. Lockdown has given people a lot more time to cook at home, to think about where they source their food, and hopefully people have learned in the last 12 months”.

After a working lifetime of defying convention, he sees a delightful irony in the fact that this inner-city Dubliner is now at the vanguard of the farming revolution.

“At 21, you want to rule the world; at 31, you just want to own your own little corner of it” is how he described his journey into the industry. Now, much later in life, Brian O’Reilly is unlikely to rule the world, but he could yet play a key role in changing how it feeds itself.

Ifac Insights

At a time when many farmers are worried about the future viability of their businesses, diversification can be a good way to create new opportunities and generate revenue.

While many Irish farms rely on off-farm income to remain viable, working for others is not the only way to generate additional revenue. Farm assets can sometimes be used to diversify into new activities that complement your existing business, improve your work/life balance and benefit the bottom line.

Before deciding to diversify, it is important to assess the business case.

This is because some activities that you might diversify into could involve a substantial outlay before any returns are realised, and certain activities could impact your eligibility for important tax incentives when transferring your business to the next generation.

Switching farm assets from agriculture to tourism, for example, could affect your ability to claim agricultural relief.

When assessing the business case, it is a good idea to get advice from professionals with expertise in the farming sector who understand the pitfalls and help you make the right decisions.