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The global agriculture has I high environmental impact (30 percent of global emissions). This is mainly the case due to the long supply chains. Currently, the average distance traveled of agricultural products is more than 2,400 km (Urban Farming in the City of tomorrow, 2018). Using Urban Farming approaches, this can ideally be reduced to less than 10 km. This offers a new attractive option for a decarbonized food distribution. Besides that, securing urban food and resource supply is increasingly becoming a challenge, especially in heavily populated cities with limited access to surrounding agricultural areas. Thus, food production within the urban areas offers various opportunities for cities.

There are differnet tyoes of urban farms, e.g. differed by the location of the farm (such as rooftop, window, greenhouse, balcony, containor, inddor or vertical farming), differed by the method of farming (such as hydroponic, aeroponic or mistponic farming) or differed by the people cultivating the plants (such as community, instiutional, commercial or personal farms).

The following information gives a general overview, but mainly focuses on indoor and vertical farming.



The main goal of Urban Farming is to use bring food production and gardening back into the urban areas. Thereby, it decreases the distances agricultural products need to travel and likewise, increases the awareness of the citizens towards food production and sustainable behavior. Besides that, the solution achieves the benefits listed below. Whereas some benefits are likely to be fulfilled with a basic implementation of the solution, the fulfillment of the potential benefits depends on the functions implemented in a specific project.

Main Benefits
  • Promoting sustainable use of land

  • Reducing need for travel

  • Reducing GHG emissions


Functions help you to understand what the products can do for you and which ones will help you achieve your goals.
Each solution has at least one mandatory function, which is needed to achieve the basic purpose of the solution, and several additional functions, which are features that can be added to provide additional benefits.

Mandatory Functions
    plant agricultural plants in an urban environment

    Products, that enable the user to plant in an urban environment

    distribute locally produced agricultural products

    Products bringing the argriculutral product to the consumer

Potential Functions
    enable citizens to do gardening in an urban environment
    process agricultural products

Business Model

The market for urban farming is a rapidly emerging market. According to forcasts, the expected Compound Annual Growth Rate (CAGR) between 2016 and 2022 is expected to be 27 to 30 percent. In 2013 the market volume of vertical farming was $ 403 million and research analysts projected it growing to $1.97 billion by 2020 (Garden Culture Magazine, 2016).

The costs of urban farming exceed convetional farmin in the initial investment, as well as the running costs. Within a survey conducted by Fraunhofer IAO, 16 urban farms were interviewed - 46 percent of them invested more than € 5 million as capital costs. Opposingly, the survey shows that 50 percent of farms invested less than € 3,000 per m2 (25 percent less than € 100). The sources of the fiscal measures varied widly. The following graphic shows different models of investment and the share of the urban farms interviews, that used it (Urban Farming in the City of tomorrow, 2018).


Accroding to a study about business models of urban farming in Spain, Italy and Germany, there are three main types of business models currently available:

  • Lowcost specialisation: one/ very few products and services that are locally missing
  • Differentiation: mostly focused on short supply chains, e.g. direct sale arrangements with very few intermediaries (e.g. canteens or restaurants) or new forms of customer participation (e.g. renta-field concept, courses)
  • Diversification: As for example linking cultural heritage, gastronomy with local production

The business models of urban farming are mainly not cost driven but also consider societal and environmental aspacts (Business models in urban farming, 2017). Similarly, the findings of Aubry and Kebir (2013) state that a mass market orientation to bring down costs is no longer sufficient for agricultural activities when acting under urban environments with associated societal demands.

Vertical farming can increase the profitability of urban farms as the are occupied is user more efficiently. Accoring to the survery conducted by Fraunhofer IAO 65 percent of the respondents indicated to operate their urban farm on more than five growing layers (Urban Farming in the City of tomorrow, 2018).

A possible obstacle to the profitability of urban farms is the high energy demand as many farms use artificial sources of light. The overall demand is very variable and depends on the type of technology, the scale and the products of the urban farm (Urban Farming in the City of tomorrow, 2018).




Driving Factors

Technical development:

The increasing technological development in ontrolled-environment agriculture (CEA) increases the competitiveness urban farms against conventional farming methods. Technologies used widely are for example controlled irigniation, Heating, Ventilation and Air Conditioning (HVAC), Water recycling, temperature, humidity, brightness and color sensors as well as ICT platforms (Urban Farming in the City of tomorrow, 2018).

Urban growth:

Especially, in developed countries, that suffering from continued urban sprawl and loss of peri-urban agricultural land the potential market of urban farming is steadily increasing. 

Micro climate improvement:

A further motive for the support of urban farms are thei environmental impacts to the local area. Vegetation can help increase humidity, lower temperatures and introduce more pleasant odors to the city, capture dust and gases from polluted air through deposition and capture by the foliage of plants and trees, and soils, and help break wind and intercept solar radiation, creating shadow and protected places.

Legal Requirements

On the European level, there are currently barely governmental programs to promote these initiatives, increase awareness and drive the transition to urban farming. Challenges such as inadequate existing rules (or lack of appropriate rules designed to foster the development of this sector) and legal issues (e. g. organic labeling and European Novel Food Regulations) need to be tackled (Urban Farming in the City of tomorrow, 2018). Especially, Marketing initiative and policy integration, such as including environmental awarenessraising and wide public participation in urban development, could support the evolvement of urban farming in European cities (Urban agriculture and sustainable cities, 2000). Besides the direct political support of urban farming, the support of research is needed to increase efficiency, reduce energy consumption and thus ensure the economic and environmental viability of such projects (Urban Farming in the City of tomorrow, 2018).

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