Activity Report

November 28, 2014Next generation agriculture business with sunlight type plant factory

At The KAITEKI Institute (TKI), we are studying society and making forecasts of the future by broadly collecting information from around the world, aiming at finding the direction of future innovation. One of the major themes that we are currently working on is water and food, or issues in agriculture.

We analyzed long-term trends in society as well as the current and future environment surrounding food leading up to the year 2050, and reached the following conclusions about the demand and market for food in the 21st century

1) Demand for food, from a physical as well as sociological perspective, may not be met in developing countries due to economic reasons.
2) In emerging countries, rising standards of living will cause higher demand for more sophisticated food.
Figure 1 shows the transition in global demand for various crops. It can be seen that the growth in demand for fruits and vegetables has been exceeding that of global GDP. This means that the diet of emerging countries is becoming richer at a faster pace than the increase in global population and GDP.

(Figure1)

It is only natural that people of developing countries undergoing economic growth start seeking lifestyles that are as rich and convenient as what people in developed countries enjoy. However, with the current state of agriculture, livestock farming and fishing,demand for food in terms of both quantity and quality will not be met. In particular, we think that the most important consideration for 21st century agriculture is sustainability, which is an issue that had been completely ignored in the 20th century when the focus was solely on mass production. In particular, handling water stress and reducing greenhouse gases are two of the most important areas to consider.

Only 2.5% of water on earth is fresh, and the amount that people can use comprises a further smaller fraction of this amount. In the future, accessible fresh water is expected to become even more precious with global population growth, accompanied by increased food production, and economic development and urbanization. Taking into account that 70% of fresh water in the world is used for agriculture, next-generation water-saving agriculture technologies that can utilize water as efficiently as possible will become even more important.

Figure 2 shows the ratio of water intake from lakes and rivers (other sources of water are not included) to water demand, calculated on a daily basis during the set time period.


(Figure2)

In Figure 2, the ratio 1.0 means that estimate daily water demand is being completely met by water from lakes and rivers, and 0 means that it is not met at all. The red areas on the map are places of high water stress, where very little water is available in relation to demand. Even though there is a great deal of water flowing in the world, many places have a clear dry and wet season, and areas such as South/ Southeast Asia and the Sahel region of Africa (the green area that lies south of the Sahara desert)face drought during the dry season. These places are also shown on the map in red. In megacities (population over 10 million) where great population growth is forecast, water stress is expected to become increasingly serious in coming times.

Climate change is not considered in the forecast above, but it has become a major issue in recent years and its impact on agriculture is great. One country that has been grappling with issues of climate change and agriculture is Australia, which has very little rainfall to begin with and is said to be the driest continent on the planet. Australia often experiences droughts, which can cause huge drops in production of crops such as wheat. For example in 2006, Victoria State (the state in Southern Australia in which Melbourne is located) had an annual rainfall of 367mm, which was the third driest year on record. Such things happen frequently in Australia, and water shortage is a very serious issue for the country.

TKI is currently working on developing businesses in sustainable agriculture that can help meet future food demand. One of our business concepts involves the production and distribution of Japanese varieties of vegetables in sunlight type water-saving plant factories in urban areas around the world. As a first step, we have launched an agribusiness in Victoria State, Australia, partnering with Mitsubishi Plastics Inc. (MPI) and Agriculture Victoria Services Pty, Ltd., which is an affiliate company of the Victoria State Department of Primary Industries. Results of locally conducted tests have shown that our plant factory system is capable of producing high-quality vegetables, pesticide-free, even in the harsh climate of Australia. The premiere of Victoria State has recognized the efforts of our project and has publicly stated his hopes for its contribution to solving climate issues for the state. (Premiere of Victoria media release “Cutting edge horticultural facility to create 40 Jobs” October 20, 2014)

We have also conducted test marketing of the produce to local upscale supermarkets and restaurants in Australia, and have received very positive feedback for our fresh, pesticide-free, tasty vegetables. As the next stage in the business, a company has been locally incorporated under MPI in July 2014 as KAITEKI FRESH AUSTRALIA PTY LTD, which will conduct everything from the production of the vegetables to sales(TKI news release, ”Launch of production trial of solar plant factory in Victoria, Australia” April 4, 2013,; “Expanded scale for agricultural experiment using sunlight type plant factory in Australia” October 21, 2013). Moving forward, we would like to establish and grow the business in Australia, and use the experience to further develop new business models. We hope to actualize a next generation agribusiness that will provide future generations of people with safe, fresh, high quality agricultural produce, which will contribute to realizing KAITEKI around the world.