Investors may be wondering what CEA strategies encompass and what might be the impact on conventional farmland investment returns?
The current world population of 7.6 billion is expected to reach 9.8 billion in 2050 according to a United Nations estimate. This growing population is anticipated to double the demand for food.1 Because farmland supply is constrained by a range of factors, including a need to protect shrinking areas of natural ecosystems, land use conversion and climate variability — greater productivity per unit area is needed to meet the expected increase in food demand.
These dynamics put conventional farmland investments in a strong, long-term position. However, as other means of food production, like controlled environment agriculture (CEA) develop and grow, the investment landscape is changing.
In this paper, we introduce the CEA approach to farming and examine the CEA industry and types of investment strategies that exist in the marketplace. We also evaluate whether CEA and conventional farming can coexist, and what this means for investors in conventional, land-based food production moving forward.
1 https://www.worldwildlife.org/initiatives/food